  In this work, we study the optimal configuration of the physical layer in
wireless networks by means of Semi-Markov Decision Process (SMDP) modeling. In
particular, assume the physical layer is characterized by a set of potential
operating points, with each point corresponding to a rate and reliability pair;
for example, these pairs might be obtained through a now-standard
diversity-vs-multiplexing tradeoff characterization. Given the current network
state (e.g., buffer occupancies), a Decision Maker (DM) needs to dynamically
decide which operating point to use. The SMDP problem formulation allows us to
choose from these pairs an optimal selection, which is expressed by a decision
rule as a function of the number of awaiting packets in the source's finite
queue, channel state, size of the packet to be transmitted. We derive a general
solution which covers various model configurations, including packet size
distributions and varying channels. For the specific case of exponential
transmission time, we analytically prove the optimal policy has a threshold
structure. Numerical results validate this finding, as well as depict
muti-threshold policies for time varying channels such as the Gilber-Elliott
channel.
