An apparatus comprising: a processing unit configured to: encode a data sequence in a plurality of modulation formats to produce a multi-rate data stream, wherein a first of the modulation formats provides a first transmission data rate, and wherein a second of the modulation formats provides a second transmission data rate different from the first transmission data rate; insert a rate change signaling block into the multi-rate data stream to indicate a rate change from the first transmission data rate to the second transmission data rate, wherein the rate change signaling block is inserted a pre-determined number of data blocks prior to the rate change; wherein a number of data blocks in the data sequence are combined and encoded with a higher order modulation format of the first modulation format and the second modulation format, and the number of data blocks to combine depends on the amount of rate change; and a frontend coupled to the processing unit and configured to: convert the multi-rate data stream into an optical signal; and transmit the converted optical signal towards a remote optical receiver via an optical network. a processing unit configured to: encode a data sequence in a plurality of modulation formats to produce a multi-rate data stream, wherein a first of the modulation formats provides a first transmission data rate, and wherein a second of the modulation formats provides a second transmission data rate different from the first transmission data rate; insert a rate change signaling block into the multi-rate data stream to indicate a rate change from the first transmission data rate to the second transmission data rate, wherein the rate change signaling block is inserted a pre-determined number of data blocks prior to the rate change; wherein a number of data blocks in the data sequence are combined and encoded with a higher order modulation format of the first modulation format and the second modulation format, and the number of data blocks to combine depends on the amount of rate change; and encode a data sequence in a plurality of modulation formats to produce a multi-rate data stream, wherein a first of the modulation formats provides a first transmission data rate, and wherein a second of the modulation formats provides a second transmission data rate different from the first transmission data rate; insert a rate change signaling block into the multi-rate data stream to indicate a rate change from the first transmission data rate to the second transmission data rate, wherein the rate change signaling block is inserted a pre-determined number of data blocks prior to the rate change; wherein a number of data blocks in the data sequence are combined and encoded with a higher order modulation format of the first modulation format and the second modulation format, and the number of data blocks to combine depends on the amount of rate change; and a frontend coupled to the processing unit and configured to: convert the multi-rate data stream into an optical signal; and transmit the converted optical signal towards a remote optical receiver via an optical network. convert the multi-rate data stream into an optical signal; and transmit the converted optical signal towards a remote optical receiver via an optical network. <EOS>