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The error rate directly impacts channel capacity by determining the maximum amount of information that can be reliably transmitted over a communication channel. As the error rate increases, the likelihood of data corruption rises, which reduces the effective capacity of the channel. According to Shannon's capacity theorem, if the error rate exceeds a certain threshold, the channel's capacity can drop significantly, making it challenging to achieve reliable communication. Therefore, minimizing the error rate is crucial for maximizing channel capacity and ensuring efficient data transmission.

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