In this article a new quantitative method for polarization mode dispersion (PMD) tolerance testing is presented. Novel PMD sources, test procedures, and evaluation tools have been integrated into a comprehensive test methodology. The new PMD sources provide not only first order PMD, but also higher order PMD states. These sources are stable, able to maintain any desired PMD state for extended bit error tests. The basis of the new PMD tolerance methodology is to remove PMD statistics during the data acquisition, and reintroducing the PMD statistics in the data analysis. Total PMD outage time can then be determined for a fiber span with known mean PMD and defined system power penalty for PMD distortion. We will describe a new PMD source, test and evaluation method in detail, showing simulated test results and the ability to use this method to optimize optical transport systems and network design rules.