Hello,

We should operate a transmitter at 100 percent moduclation so that we can provide maximum amount of energy in the sideband but 166.7 percent modulation is known as over modulation which causes singnals to sound severely distorted.

To mease degree of modulation we use a modulation factor (M) which is given by M=em/ec where em=peak rms valus of modulating voltage and ec=the peak(peak to peak)

and Modulation  percentage is when we multiply M by 100

so when em>ec then only we will get a percentage modulation greater than 100 ie over modulation.In this case the em/ec value would have been equal to 1.667(em=ec*1.667).Therefore we have got the value of overmodulation as 166.7

Hope this helps.