As early as 1924, an AT&T engineer, Henry Nyquist, realized that even a perfect
channel has a finite transmission capacity. He derived an equation expressing
the maximum data rate for a finite-bandwidth noiseless channel. In 1948, Claude
Shannon carried Nyquist’s work further and extended it to the case of a channel
subject to random (that is, thermodynamic) noise (Shannon, 1948). This paper is
the most important paper in all of information theory. We will just briefly summarize
their now classical results here.