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The channel efficiency, also known as bandwidth utilization efficiency, is the percentage of the [[net bit rate]] (in bit/s) of a digital [[communication channel]] that goes to the actually achieved throughput. For example, if the throughput is 70 Mbit/s in a 100 Mbit/s Ethernet connection, the channel efficiency is 70%. In this example, effective 70 Mbit of data are transmitted every second.
Channel utilization is instead a term related to the use of the channel disregarding the throughput. It counts not only with the data bits but also with the overhead that makes use of the channel. The transmission overhead consists of preamble sequences, frame headers and acknowledge packets. The definitions assume a noiseless channel. Otherwise, the throughput would not be only associated
In a point-to-point or [[point-to-multipoint communication]] link, where only one terminal is transmitting, the maximum throughput is often equivalent to or very near the physical data rate (the [[channel capacity]]), since the channel utilization can be almost 100% in such a network, except for a small inter-frame gap.
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