Here, the speaker is asking of how he or she will be able to concentrate. Talking about ability #can is appropriate to describe a present ability. The sentence does not contain possibility or polite request. How can i concentrate with you. If the speaker asks about a past event, he says: How was i able to concentrate with you?

Here, the speaker is asking of how he or she will be able to concentrate. Talking about ability #can is appropriate to describe a present ability. The sentence does not contain possibility or polite request. Another possibility, the speaker might mean that if he were able , he could concentrate, but he wasn't able, so this is unreal past. How could i concentrate with you breathing on my neck? To mean that he couldn't in reality. The same main clause which is he could concentrate is used in a form of question. Instead of saying, i could concentrate with you, if you were not breathing on my neck, he used the interrogative form, how could i concentrate with you breathing on my neck? For more information read about unreal past