Bits through queues

Considers the following simple communication channel model: an error-free bit pipe leading to a buffer modeled by a single-server queue whose “packets” or “customers” are single bits. If the service rate is μ bits/sec, common wisdom would indicate that the Shannon capacity of this communication link is μ bits/sec. As we show in this paper, that intuition is wrong: the answer is actually higher than μ bits/sec. How could we possibly transmit information at a rate faster than the service rate? After all, overdriving the queue with an arrival rate higher than p will not do, as the queue will become unstable and its output rate will not be higher than μ. The capacity is higher than μ because information can be encoded into the arrival epochs. A simpler and more fundamental problem, namely the Shannon capacity of the single-server queue, is also considered