  We consider the problem of determining asymptotic bounds on the capacity of a
random ad hoc network. Previous approaches assumed a link layer model in which
if a transmitter-receiver pair can communicate with each other, i.e., the
Signal to Interference and Noise Ratio (SINR) is above a certain threshold,
then every transmitted packet is received error-free by the receiver thereby.
Using this model, the per node capacity of the network was shown to be
$\Theta(\frac{1}{\sqrt{n\log{n}}})$. In reality, for any finite link SINR,
there is a non-zero probability of erroneous reception of the packet. We show
that in a large network, as the packet travels an asymptotically large number
of hops from source to destination, the cumulative impact of packet losses over
intermediate links results in a per-node throughput of only $O(\frac{1}{n})$.
We then propose a new scheduling scheme to counter this effect. The proposed
scheme provides tight guarantees on end-to-end packet loss probability, and
improves the per-node throughput to $\Omega(\frac{1}{\sqrt{n}
({\log{n}})^{\frac{\alpha{{+2}}}{2(\alpha-2)}}})$ where $\alpha>2$ is the path
loss exponent.
