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In this paper the performance limits and design principles of rateless codes over fading channels are studied. The Diversity-Multiplexing Tradeoff (DMT) is used to analyze the system performance for all possible transmission rates. It is revealed from the analysis that the design of such rateless codes follows the design principle of approximately universal codes for Multiple-Input Multiple-Output (MIMO) channels. It is also shown that for a Single-Input Single-Output (SISO) channel, simple permutation codes of unit length for parallel channels can be transformed directly into rateless codes that achieve the DMT performance limit of the channel.
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