I firmly disagree with your initial point. We have data flowing at rate N. It fits perfectly and precisely through a pipe of N size, with no room to spare (as

I firmly disagree with your initial point. We have data flowing at rate N. It fits perfectly and precisely through a pipe of N size, with no room to spare (as is the way of a PRI). We add to this data additional packetization overhead that was never present before. So where we once had N, we now have N + >0. That's more than N. The pipe is still only N, though -- it hasn't changed at all. The data no longer fits; it cannot fit. Capacity is thus reduced by the addition of packetization.