Can quantum entanglement increase optical channel capacity?

Random, time-dependent birefringence of optical fibers causes depolarization and precludes one from exploiting polarization degree of freedom to code information transmitted through an optical channel. With a photon pair showing maximum entanglement one can reliably code one bit of information into their joint polarization degree of freedom provided that the characteristic time of birefringence fluctuations is longer than the temporal separation between the photons. We demonstrated this effect experimentally based on spontaneous parametric down-conversion in nonlinear crystals pumped by a femtosecond laser beam.