An optical device extracts an information bearing sideband such as an FSK or SCM signal (label) from a composite signal that includes the sideband and an orthogonally modulated signal such as an intensity modulated signal (payload) by employing polarization beam splitting and polarization transformation. Polarization transformation is accomplished by splicing the optical signal into a polarization maintaining fiber at a desired angle so that it is separated into two orthogonal polarizations that experience differential group delay in the fiber. The fiber is characterized by a beat length L.sub.beat and the fiber is designed to have a length substantially equal to (L.sub.beat.times.f.sub.c)/2.delta.f, wherein the sidebands of the composite signal are separated by a wavelength difference .delta.f and f.sub.c is the nominal center frequency of the composite signal. This device has been shown to be useful for extracting GMPLS LSC level wavelength labels from either an FSK/IM composite signal or an SCM/IM composite signal.