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If we send one bit per pulse when the pulse rate is equal to the Nyquist rate, the maximum data
rate is limited to 2W bits per second. However, we can map multiple bits to a single pulse by
allowing more than two levels. For example, we could map 00 to −Ap(t), 01 to − A3 p(t), 10 to
A
3 p(t) and 11 to Ap(t). In that case, the maximum data rate becomes 4W bits per second. In
general, if the number of amplitude levels are 2m where m is a positive integer the maximum data
rate is 2W m bits per second. This seems to suggest that we can increase the achievable data
rate by increasing the number of levels. But this strategy does not work due to the presence
of noise. As the number of levels increase while keeping the maximum amplitude constant,
the levels will get closer to each other and can be confused for each other easily resulting in
demodulation errors. These ideas are due to Claude Shannon who proved that the maximum
data rate in an additive white gaussian noise (AWGN) channel with bandwidth W and SNR S
can support with arbitrarily small BER is less than the following value,
which is called the capacity of the channel. For our purposes, we assume that the a finite-
bandwidth baseband channel allows us to transmit at a finite data rate with a small but non-zero
BER where the data rates are directly proportional to the bandwidth.
In summary, the main physical layer issues in baseband channels are timing recovery and ISI
mitigation. Both of them influence the type of modulation scheme which is employed. For
example, line coding schemes which have frequent signal level transitions are chosen because
they aid timing recovery at the receiver. Transmitted pulse shapes are chosen to minimize ISI
at the receiver. So in fact it is the ease of demodulation in the presence of these issues which
is the factor determining the choice of modulation scheme. When pulse shaping to avoid ISI is
not feasible, equalization is used to remove it. Both equalization and initial timing recovery are
accomplished by the presence of a preamble which is sent immediately preceding the information-
bearing signal.
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