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Here is my trail of thought: Since Ethernet works on the principle of CSMA/CD one can possible setup a rogue host which transmits packets all the time forcing other to exponentially back off until they can no longer transmit any data. Now the InterFrameGap can allow opportunities for the rogue host to detect collision itself but lets say we make the rogue host adapter such that it does not back of exponentially and starts re-transmitting as soon as it detects a collision. Am I missing something here>

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up vote 8 down vote accepted

On older single collision domain networks, yes, this was called a "chattering" host or NIC and cause plenty of problems as the rest of the network had to deal with the limited bandwidth.

On modern switched networks this has much more limited effect, though it depends on the switches.

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Why is this not a problem on a modern switched networks. Can you point to the right reference if this is too trivial to answer. –  Bruce Feb 8 '12 at 19:29
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Because switches break up collision domains, since each port on a switch is a separate collision domain. See en.wikipedia.org/wiki/Ethernet_bridge and en.wikipedia.org/wiki/… –  Zoredache Feb 8 '12 at 19:30
    
It's still potentially a problem for the chattering host; but the rest of the network is switched. A switched network limits collision domains to each link (eliminating them ideally). So if a NIC is chattering it may saturate it's individual link to the switch, but the switch will not repeat the chatter to the rest of the network. –  Chris S Feb 8 '12 at 19:31
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Then you could potentially saturate the receiving links, but you could not deny them the ability to transmit as well. Particularly since switches are full-duplex. –  Zoredache Feb 8 '12 at 19:35
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Many higher-end switches will automatically start disallowing broadcasts from NICs that send "too many". Also, since there is no guarantee of delivery a good percentage of other traffic would "beat" the chattering to the ports and still get through. –  Chris S Feb 8 '12 at 19:41
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