Space-time block codes are a remarkable modulation scheme discovered recent
ly for the multiple antenna wireless channel. They have an elegant mathemat
ical solution for providing full diversity over the coherent, flat-fading c
hannel, In addition, they require extremely simple encoding add decoding. A
lthough these codes provide full diversity at low computational costs, we s
how that they incur a loss in capacity because they convert the matrix chan
nel into a scalar AWGN channel whose capacity is smaller than the true chan
nel capacity. In this letter the loss in capacity is quantified as a functi
on of channel rank, code rate, and number of receive antennas.