A differential delay detection system and method includes an optical splitter to split an incoming optical signal between a first path and a second path. The first path includes a cross-polarization interferometer configured to separately generate polarization independent outputs using split paths and to generate cross-polarization interference outputs, balanced photodetectors to aid in removing cross-polarization beating noise, and a polarization demultiplexer configured to combine the polarization independent outputs and the cross-polarization interference outputs from the cross-polarization interferometer with updated coefficients received from the second path to remove the cross-polarization mixed signals. The second path includes a training signal receiver configured to compute the updated coefficients and output the updated coefficients to the polarization demultiplexer.