By deriving a generalized Shannon capacity formula for multiple-input, mult
iple-output Rayleigh fading channels, and by suggesting a layered space-tim
e architecture concept that attains a tight lower bound on the capacity ach
ievable, Foschini has shown a potential enormous increase In the informatio
n capacity of a wireless system employing multiple-element antenna arrays a
t both the transmitter acid receiver. The layered space-time architecture a
llows signal processing complexity to grow linearly, rather than exponentia
lly, with the promised capacity increase. This paper includes two important
contributions: First, we show that Foschini's lower bound is, in fact, the
Shannon bound when the output signal-to-noise ratio (SNR) of the space-tim
e processing in each layer is represented by the corresponding "matched fil
ter" bound, This proves the optimality of the layered space-time concept. S
econd, we present an embodiment of this concept for a coded system operatin
g at a low average SNR and in the presence of possible intersymbol interfer
ence, This embodiment utilizes the already advanced space-time filtering, c
oding and turbo processing techniques to provide yet a practical solution t
o the processing needed. Performance results are provided for quasi-static
Rayleigh fading channels with no channel estimation errors. We see for the
first time that the Shannon capacity for wireless communications can he bot
h increased by N times (where N is the number of the antenna elements at th
e transmitter and receiver) and achieved within about 3 dB in average SNR,
about 2 dB of which is a loss due to the practical coding scheme we assume-
the layered spare-time processing itself is nearly information-lossless!.