EVALUATION COPY. Basic Telecommunications: Student Guide PCL02-CNBT00-PR-212! Version 6.0P

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Basic

Telecommunications:

Student Guide

PCL02-CNBT00-PR-212

!

Version 6.0P

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Blank Text

For The

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The CCNT Certificate

Program

The convergence of telecommunications and data networks is happening at a rapid pace, and IT professionals are increasingly expected to understand both voice and data technologies. In response to this need, the Certified in Convergent

Network Technologies (CCNT) program has been

developed.

CCNT is the only vendor-neutral, industry-standard, training and testing program in core convergence technologies sponsored by the TIA (Telecommunications Industry Association). To obtain this industry-valued credential, you must pass six (6) competency tests:

• Basic Telecommunications

• Basic Data Communications

• Computer-Telephony Integration (CTI) Essentials

• Local Area Networks (LANs)

• Broadband Technologies

• Voice over IP (VoIP) Essentials

ComputerPREP offers flexible learning solutions mapped to these competencies, including instructor-led training, computer-based training (CBT), and Web-based training (WBT).

Benefits of the CCNT Certificate

The CCNT certificate is geared toward anyone who wants to remain current in the data and telecommunications industries, including network administrators and engineers;

telecommunications sales professionals, engineers and consultants; and telecommunications and data communications instructors. CCNT is also well suited to anyone taking advanced vendor-neutral or product-specific certificate programs.

With the CCNT certificate, you can prove competency in data and telecommunications technologies, enhance career potential, and build confidence.

Because the CCNT certificate program develops and certifies work-ready skills, it can be used as an employee-screening tool. It also provides an industry-valued, competency-based

credential that is sponsored by the TIA.

Preparing for the CCNT Exam

The CCNT exam consists of six (6) separate competency tests. These tests can be taken independently of one another, allowing you to prepare for each test individually. The CCNT certificate program requires that you become familiar with all six (6) competency areas. This course is designed to provide the necessary competency skills required to pass the

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Blank Text

For The

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Basic

Telecommunications:

Student Guide

Published by ComputerPREP



, Inc.

Phoenix, Arizona

PCL02-CNBT00-PR-212 Version 6.0P

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Basic Telecommunications

Developers

Meagan McLaughlin and Brent Capriotti

Editors

Jill McKenna and David Oberman

Publishers

Joseph Flannery and Joseph A. Servia

Project Managers

Dave De Ponte and Todd Hopkins

TRADEMARKS

ComputerPREP is a registered trademark of ComputerPREP, Inc. in the United States and other countries.

Microsoft, Microsoft Internet Explorer logo, and Windows are either registered trademarks or trademarks of the Microsoft Corporation in the United States and/or other countries. All other product names and services identified throughout this book are trademarks or registered trademarks of their respective companies. They are used throughout this book in editorial fashion only. No such use, or the use of any trade name, is intended to convey endorsement or other affiliation with the book. Copyrights of any screen captures in this book are the property of the software’s manufacturer.

DISCLAIMER

ComputerPREP, Inc. makes a sincere effort to ensure the accuracy of the material described herein; however, ComputerPREP, Inc. makes no warranty, express or implied, with respect to the quality, correctness, reliability, currentness, accuracy, or freedom from error of this document or the products it describes. ComputerPREP, Inc. makes no representation or warranty with respect to the contents hereof and specifically disclaims any implied warranties of fitness for any particular purpose. ComputerPREP, Inc. disclaims all liability for any direct, indirect, incidental, consequential, special, or exemplary damages resulting from the use of the information in this document or from the use of any products described in this document. Mention of any product does not constitute an endorsement by ComputerPREP, Inc. of that product. Data used in examples and sample data files are intended to be fictional. Any resemblance to real persons or companies is entirely coincidental.

ComputerPREP makes every effort to ensure the accuracy of URLs referenced in all our materials, but we can not guarantee that all will be available throughout the life of the course. When this manual/disk was published, all URLs were checked for accuracy and completeness. However, due to the ever-changing nature of the Internet, some URLs may no longer be available or may have been re-directed.

COPYRIGHT NOTICE

This Guide is copyrighted and all rights are reserved by ComputerPREP, Inc. No part of this publication may be reproduced, transmitted, transcribed, stored in a retrieval system, or translated into any language or computer language, in any form or by any means, electronic, mechanical, magnetic, optical, chemical, manual, or otherwise, without the prior written permission of ComputerPREP, Inc., 410 North 44th Street, Suite 600, Phoenix, Arizona 85008.

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Pre-Assessment Questions ... 2-2 Station Sets... 2-3 Key Systems...2-11 Private Branch Exchange (PBX) ...2-16 Centrex—Virtual PBX...2-24 Lesson Summary...2-25 Lesson 2 Review...2-27 Lesson 3: Services... 3-1 Pre-Assessment Questions ... 3-2 Introduction... 3-3 Service Basics...3-11 Line and Trunk Features ...3-16 Dedicated Services ...3-21 Service Providers...3-24 Specialized Services...3-26 Lesson Summary...3-31 Lesson 3 Review...3-34

Lesson 4: Analog Concepts... 4-1

Pre-Assessment Questions ... 4-2 The Network ... 4-3 The Voice Signal... 4-4 Transmission Variables... 4-5 Multiplexing ... 4-7 FDM ... 4-8 Lesson Summary...4-11 Lesson 4 Review...4-13

Lesson 5: Digital Concepts ... 5-1

Pre-Assessment Questions ... 5-2 Digital Signals... 5-3 Advantages of Digital Technology ... 5-4 Digital Transmission... 5-5 Pulse Code Modulation ... 5-7 Digital Voice Transport ...5-12 Optical Standards ...5-14

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Digital Loop Carriers ...5-17 Lesson Summary...5-18 Lesson 5 Review...5-19

Lesson 6: Networks... 6-1

Pre-Assessment Questions ... 6-2 Telecommunications Networks... 6-3 The Flexibility of Computer Technology... 6-4 Current Network Structure... 6-5 The Exchange/Central Office ... 6-9 Cellular Networks ...6-12 Internet Telephony ...6-14 Lesson Summary...6-19 Lesson 6 Review...6-21 Lesson 7: Transmission ... 7-1 Pre-Assessment Questions ... 7-2 A Simple Transmission Network... 7-3 What Are the Transmission Media?... 7-4 Two-Wire Analog Media ... 7-8 Multicircuit Media and Systems...7-12 Lesson Summary...7-18 Lesson 7 Review...7-20

Lesson 8: Signaling ... 8-1

Pre-Assessment Questions ... 8-2 Basic Types of Signaling ... 8-3 Supervisory Signaling ... 8-5 Start-Dial Signals ... 8-8 Address Signaling ... 8-8 Incoming Call Indication ...8-10 Call Progress Tones and Miscellaneous Signals...8-11 Common Channel Signaling ...8-12 Signaling System 7 (SS7) ...8-14 Identifying the Signaling Interface ...8-21 Lesson Summary...8-25 Lesson 8 Review...8-27 Lesson 9: Switching ... 9-1 Pre-Assessment Questions ... 9-2 Introduction to Switching... 9-3 Analog Switches ... 9-5 Digital Switches... 9-6 Time-Division Switching ... 9-7 Space-Division Switching ... 9-9 CO Digital Switches ...9-10 Optical Signal Switching ...9-14 Lesson Summary...9-14 Lesson 9 Review...9-16

Lesson 10: Application Analysis ... 10-1

Pre-Assessment Questions ...10-2 Determination of Applications...10-3 Determination of Quantities ... 10-15 Lesson Summary... 10-18

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Lesson 10 Review ... 10-20

Glossary ...Glossary-1 Index ... Index-1 Supplemental CD-ROM Contents ... Supplemental CD-ROM Contents-1

List of Figures

Figure 1-1: IP phones, cable modem, and cell phones support voice, fax, and data ... 1-3 Figure 1-2: Growth in telephony since 1980... 1-4 Figure 1-3: LECs share telecommunication markets with competitors ... 1-5 Figure 1-4: Telecommunications revenue distribution over time... 1-6 Figure 1-5: Demarc is connection point between CPE and PSTN ... 1-7 Figure 1-6: Demarc is often housed in equipment room... 1-7 Figure 1-7: Wire center houses switch that is connected to all other switches ... 1-9 Figure 1-8: Access connects CPE to network ...1-10 Figure 1-9: The FCC regulates interstate communications ...1-11 Figure 1-10: Standards organizations ...1-12 Figure 1-11: Current state of telecommunications industry regulation...1-13 Figure 1-12: Telecommunications industry monopolization and demonopolization...1-14 Figure 1-13: Telecommunications industry regulation before 1980s...1-16 Figure 1-14: Telecommunications industry regulation -- 1990s (United States) ...1-17 Figure 1-15: Telecommunications industry regulation — 2000s...1-18 Figure 1-16: Early development of telecommunications technology ...1-19 Figure 1-17: Stored program control switch reduced telephony costs...1-20 Figure 1-18: Mobile telephones and Web browsers changed telecommunications...1-20 Figure 2-1: Station sets are made in many varieties ... 2-3 Figure 2-2: Station set functions ... 2-4 Figure 2-3: Single line and multiline analog sets... 2-5 Figure 2-4: Analog signaling techniques ... 2-6 Figure 2-5: Touchtone signaling ... 2-7 Figure 2-6: Supervisory signaling ... 2-8 Figure 2-7: A digital set has more than one pair of wires ... 2-8 Figure 2-8: Digital sets use message-oriented and stimulus signaling ... 2-9 Figure 2-9: Advanced station set features ...2-10 Figure 2-10: Wireless sets communicate through antennas ...2-11 Figure 2-11: Key systems allow users to share lines...2-12 Figure 2-12: Key system inbound features...2-13 Figure 2-13: DNIS identifies the number originally dialed by the caller...2-14 Figure 2-14: Key system outbound features...2-15 Figure 2-15: Intercom calling features ...2-16 Figure 2-16: Key systems versus PBXs...2-16 Figure 2-17: Outbound call functionality of PBX systems...2-17 Figure 2-18: Inbound call functionality of PBX systems...2-18 Figure 2-19: Intra-business features of PBX systems...2-19 Figure 2-20: OPX and DISA are PBX features used by off-premise employees ...2-20 Figure 2-21: Automatic call distributor (ACD)...2-20 Figure 2-22: PBX system with ACD ...2-21 Figure 2-23: PBX administrative and maintenance capabilities ...2-22 Figure 2-24: Systems associated with PBX systems ...2-22 Figure 2-25: Centrex is provided by an LEC or IXC...2-24 Figure 3-1: Types of telecommunications services ... 3-3 Figure 3-2: Call billing regions ... 3-4

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Figure 3-3: Local call billing... 3-4 Figure 3-4: Billing boundaries ... 3-5 Figure 3-5: San Francisco local calling area... 3-6 Figure 3-6: Local calling area for Sunnyvale... 3-7 Figure 3-7: California LATA map... 3-7 Figure 3-8: Long-distance call billing... 3-7 Figure 3-9: Internal carrier billing... 3-8 Figure 3-10: Analog business lines ...3-11 Figure 3-11: Key systems use analog lines to connect to network ...3-12 Figure 3-12: 2-way combo trunks can be analog or digital ...3-12 Figure 3-13: 2-way combo and outdial trunks ...3-13 Figure 3-14: DID trunks allow direct calls to receiving station...3-13 Figure 3-15: Dedicated access using T1 system...3-14 Figure 3-16: 2-way DID using dedicated access ...3-15 Figure 3-17: 2-way DID with long-distance service ...3-15 Figure 3-18: Integrated T1 reduces the number of trunks required ...3-16 Figure 3-19: CPE features ...3-17 Figure 3-20: Sequential hunting...3-19 Figure 3-21: Circular hunting...3-19 Figure 3-22: Remote call forwarding ...3-20 Figure 3-23: Features available on trunks...3-20 Figure 3-24: Non-switched services are dedicated services ...3-21 Figure 3-25: Pricing depends on service type, bandwidth and distance...3-21 Figure 3-26: Many small businesses use traditional switched access ...3-24 Figure 3-27: PBXs use dedicated access ...3-24 Figure 3-28: Integrated communications providers can provide all services ...3-25 Figure 3-29: Matrix of services available from providers ...3-26 Figure 3-30: Specialized services ...3-26 Figure 3-31: ISDN and switched 56 connections ...3-29 Figure 3-32: Service provider application project ...3-31 Figure 4-1: Switching refers to the routing of a call... 4-3 Figure 4-2: Signaling involves call setup information ... 4-3 Figure 4-3: Transmission transmits voice and data point-to-point ... 4-3 Figure 4-4: Sound is produced by moving air ... 4-4 Figure 4-5: Transduction is the conversion of energy ... 4-4 Figure 4-6: An analog signal can be charted as a sine wave ... 4-4 Figure 4-7: Frequency is the number of cycles completed in a second... 4-5 Figure 4-8: A string can carry sound... 4-5 Figure 4-9: The effect of attenuation on frequency... 4-6 Figure 4-10: The effect of attenuation on frequency in loaded cable ... 4-6 Figure 4-11: Electrical noise is caused by nearby electrical interference ... 4-7 Figure 4-12: Full-duplex transmission ... 4-7 Figure 4-13: Open wire line, radio and coax carry multiplexed signals ... 4-8 Figure 4-14: Frequency-division multiplexing (FDM)... 4-8 Figure 4-15: Modulation... 4-9 Figure 4-16: Signal modulation ... 4-9 Figure 4-17: The bandpass filter removes the extra sideband and carrier ...4-10 Figure 4-18: Channel bank output ...4-10 Figure 4-19: Channel capacity of L carriers ...4-10 Figure 4-20: Factors affecting noise in analog systems ...4-11 Figure 5-1: Digital signals versus analog signals... 5-3 Figure 5-2: Analog signals are electrical energy... 5-3 Figure 5-3: Digital signals represent the original signal indirectly ... 5-3

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Figure 5-4: Analog bandwidth is measured in frequency range ... 5-3 Figure 5-5: Digital bandwidth is measured in bits per second ... 5-4 Figure 5-6: Regenerators restore attenuated digital signals... 5-4 Figure 5-7: Noise is amplified with analog signal ... 5-4 Figure 5-8: Digital signals are resistant to crosstalk ... 5-5 Figure 5-9: Digital circuitry has become more affordable ... 5-5 Figure 5-10: Backward compatibility requires signal conversion ... 5-6 Figure 5-11: Codecs perform analog/digital conversions ... 5-6 Figure 5-12: Codecs are found in many types of equipment ... 5-7 Figure 5-13: Codecs use many methods of analog-to-digital conversion... 5-8 Figure 5-14: Pulse amplitude modulation samples 8,000 times per second ... 5-8 Figure 5-15: PAM's output—series of pulses... 5-9 Figure 5-16: DPCM focuses on difference between samples ...5-10 Figure 5-17: ADPCM addresses DPCM's weaknesses...5-11 Figure 5-18: Delta modulation records direction of change in samples ...5-11 Figure 5-19: DS0 is standard for single PCM voice channel...5-12 Figure 5-20: DS1 frame is composed of 24 DS0s and one framing bit...5-13 Figure 5-21: Channelized versus non-channelized T1 ...5-13 Figure 5-22: DS0 digital hierarchy for electronic media...5-14 Figure 5-23: Optical transmission includes source, medium and receiver...5-14 Figure 5-24: Optical carrier standards...5-14 Figure 5-25: Twisted pair is used for distances up to 15,000 feet from CO...5-17 Figure 6-1: IXC POPs in rural areas carry signals to remote switches ... 6-3 Figure 6-2: Metropolitan areas require complex networks ... 6-3 Figure 6-3: Complex networks offer multiple management schemes... 6-4 Figure 6-4: Missouri LATA map ... 6-5 Figure 6-5: LATAs contain many COs and several exchanges... 6-5 Figure 6-6: IXC POPs can provide IXC access within LATA... 6-6 Figure 6-7: Rural LATA using wire center... 6-6 Figure 6-8: IXC A has direct connection with all ILECs ... 6-7 Figure 6-9: IXC B has connection with ILECs it uses frequently... 6-7 Figure 6-10: CLEC A and CLEC B are both directly connected to IXC C ... 6-8 Figure 6-11: Missouri LATA map and area codes... 6-8 Figure 6-12: Metropolitan wire center ...6-10 Figure 6-13: CLEC circuit switch with digital crossconnect and multiplexers ...6-11 Figure 6-14: Mesh configuration used in areas of heavy traffic...6-11 Figure 6-15: Star configuration is used in less dense areas ...6-12 Figure 6-16: Cellular service is provided within MSAs ...6-12 Figure 6-17: MTSOs route calls to best site to maximize signal strength...6-13 Figure 6-18: Roaming occurs when cell phone is outside its home area...6-13 Figure 6-19: Generations of cellular technology...6-14 Figure 6-20: VoIP is Internet transmission of voice and video...6-15 Figure 6-21: PSTN versus Internet ...6-16 Figure 6-22: Gateways are required for calls between PCs and phones ...6-17 Figure 6-23: VoIP using private Internet or intranet...6-18 Figure 6-24: Cable providers now offer voice services ...6-19 Figure 7-1: Typical analog phone call... 7-3 Figure 7-2: All calls are transmitted to CO for switching... 7-3 Figure 7-3: Calls are transmitted over trunk to IXC POP ... 7-3 Figure 7-4: Call may be transmitted to another CO ... 7-4 Figure 7-5: Intra-office calls stay within same wire center ... 7-4 Figure 7-6: Telephone poles and cable were common transmission media ... 7-4 Figure 7-7: Types of transmission media ... 7-5

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Figure 7-8: Full-duplex transmission ... 7-5 Figure 7-9: Carrier system used to connect PBX with CO ... 7-6 Figure 7-10: T carrier systems do not require digital/analog conversion ... 7-6 Figure 7-11: Interoffice trunks are carrier systems ... 7-6 Figure 7-12: Many different access and transport options exist ... 7-7 Figure 7-13: Types of access systems ... 7-7 Figure 7-14: Types of transport systems ... 7-8 Figure 7-15: Most analog residential circuits are two-wire circuits ... 7-8 Figure 7-16: Every residence must be connected to access network ... 7-8 Figure 7-17: DSL can use data-over-voice or pure data ... 7-9 Figure 7-18: Carriers use smart jack to terminate T1 circuit ...7-10 Figure 7-19: T1 carrier transmits 24 8-bit DS0 signals and one framing bit ...7-10 Figure 7-20: D4 superframe framing bit pattern ...7-10 Figure 7-21: Extended superframe (ESF) requires 24 frames...7-11 Figure 7-22: T1 can be multiplexed ...7-13 Figure 7-23: Electrical carrier standards ...7-13 Figure 7-24: SONET optical carrier standards ...7-14 Figure 7-25: One OC1 carries 28 T1s ...7-14 Figure 7-26: Add/drop multiplexers do not require multiplexing...7-14 Figure 7-27: Digital crossconnect system (DCS) mapping and test access ports ...7-15 Figure 7-28: SONET management includes bits for section, line and path...7-15 Figure 7-29: Alternate mark inversion (AMI) ...7-17 Figure 7-30: 2-binary, 1 quaternary (2B1Q) ...7-17 Figure 7-31: Quadrature amplitude modulation (QAM) ...7-18 Figure 8-1: Subscriber signaling, or line-side signaling ... 8-3 Figure 8-2: Interswitch signaling, or trunk-side signaling ... 8-3 Figure 8-3: Subscriber signaling uses DC signaling ... 8-3 Figure 8-4: In-band signaling ... 8-4 Figure 8-5: Out-of-band signaling ... 8-4 Figure 8-6: Common channel signaling ... 8-5 Figure 8-7: Types of supervisory signaling in UNI ... 8-6 Figure 8-8: Loop-reverse battery supervision ... 8-7 Figure 8-9: Out-of-band supervision used with ISDN or CCS lines ... 8-7 Figure 8-10: Start dial signaling ... 8-8 Figure 8-11: U.S. address signaling ... 8-9 Figure 8-12: DTMF, rotary dial and MF signaling ...8-10 Figure 8-13: Incoming call signaling varies based on trunk type ...8-11 Figure 8-14: In-band call signals ...8-11 Figure 8-15: Call setup and transmission using in-band signaling...8-13 Figure 8-16: CCS network structure...8-13 Figure 8-17: Many different links are used between CCS components ...8-15 Figure 8-18: Switches and signaling make SS7 services possible ...8-15 Figure 8-19: SS7 signaling for direct long-distance call...8-16 Figure 8-20: Redirected call using SS7 signaling...8-17 Figure 8-21: Calling name retrieval in SS7 network...8-18 Figure 8-22: Complete call using in-band signaling ...8-19 Figure 8-23: Complete call using out-of-band signaling ...8-20 Figure 8-24: Loop-start signaling is provided from the line side of the switch...8-21 Figure 8-25: DID connections are on trunk side of telco switch ...8-22 Figure 8-26: PBXs connected with tie trunks ...8-22 Figure 8-27: ISDN PRI has more powerful signal than ISDN BRI ...8-22 Figure 8-28: SS7 is used between switches ...8-23 Figure 9-1: Concentration, distribution and expansion are switching functions ... 9-3

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Figure 9-2: Switching functions... 9-4 Figure 9-3: Operations, administration, maintenance and provisioning... 9-4 Figure 9-4: Switching structure... 9-5 Figure 9-5: Step-by-step switching... 9-5 Figure 9-6: Crosspoint switches—several individual switches arranged in matrix ... 9-6 Figure 9-7: Time-division multiplexing (TDM)... 9-7 Figure 9-8: Time-division switching rearranges time slots within frames ... 9-7 Figure 9-9: Reordering time slots requires control logic, buffer and counter... 9-8 Figure 9-10: Control logic determines unloading order of time slots... 9-8 Figure 9-11: Time-division switching is useful when inputs and outputs are equal ... 9-9 Figure 9-12: Space-division switching is useful when inputs and outputs differ... 9-9 Figure 9-13: Space-division switching moves DS0s or DS1s ... 9-9 Figure 9-14: Logic gates are closed at intersecting points ...9-10 Figure 9-15: Time-division versus space-division switching ...9-10 Figure 9-16: Switches have control elements and switching fabric...9-11 Figure 9-17: Each space-switching matrix is one stage ...9-11 Figure 9-18: Time-space-time (TST) switch ...9-12 Figure 9-19: Switch configuration using time slot 4...9-13 Figure 10-1: Planning ...10-3 Figure 10-2: Business needs...10-3 Figure 10-3: Discovery process—interviews ...10-4 Figure 10-4: Considerations for discovery process ...10-4 Figure 10-5: Interview goals...10-5 Figure 10-6: Discussion areas for discovery process...10-6 Figure 10-7: System administration concerns...10-6 Figure 10-8: Information access factors ...10-7 Figure 10-9: Direct inward dialing (DID)...10-8 Figure 10-10: Inbound access to fax...10-8 Figure 10-11: Internet access considerations ...10-9 Figure 10-12: Conferencing needs ...10-9 Figure 10-13: Connectivity needs ... 10-10 Figure 10-14: Benefits of similar systems ... 10-10 Figure 10-15: Remote workers' needs...10-11 Figure 10-16: Telecommuters' needs ...10-12 Figure 10-17: Security concerns... 10-12 Figure 10-18: Business continuity ... 10-13 Figure 10-19: Protection of information... 10-13 Figure 10-20: Call center considerations... 10-14 Figure 10-21: Information flow matrix ... 10-15 Figure 10-22: Voice circuit needs ...10-16 Figure 10-23: Busy hour variations... 10-16 Figure 10-24: Service model... 10-17 Figure 10-25: Service criteria ... 10-18

List of Tables

Table 1-1: Telephony growth since 1980 ... 1-4 Table 1-2: Additional telephony authorities ...1-23 Table 3-1: Sunnyvale local calling areas ... 3-6 Table 3-2: Telephone code changes... 3-9 Table 3-3: Country codes ...3-10 Table 3-4: First four levels of DSH and T-carrier equivalents ...3-23 Table 3-5: E-carrier speeds ...3-23

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Table 5-1: Predictive codec types ...5-12 Table 5-2: ANSI-mandated rates for SONET...5-16 Table 5-3: ITU-specified rates for SDH ...5-16 Table 8-1: Common signaling interfaces...8-24 Table 9-1: TST switch calls...9-12

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Course Description

Welcome to Basic Telecommunications. This course will help you prepare for the Certified in Convergent Network Technologies (CCNT) exam, a program sponsored by the TIA

(Telecommunications Industry Association).

This course is aimed at preparation and review for the Basic Telecommunications module of the CCNT exam, as well as professional development for IT professionals. It is designed to be used in a lecture-based classroom setting.

Basic Telecommunications introduces the concepts of analog and digital technologies, networks,

business communications systems, signaling, and switching. This course has ten lessons, and each lesson covers several topics. Following are the ten lessons of the Basic

Telecommunications course, along with the topics covered in each lesson.

Topics Covered

Overview • The

Telecommunications Industry

• Terms and Technology

• Regulation and Public Policy • Technical Platform • The International Perspective Customer Premise Equipment (CPE) • Station Sets • Key Systems • Private Branch Exchange • Centrex—Virtual PBX Services • Service Basics

• Line and Trunk Features • Dedicated Services • Service Providers • Specialized Services Analog Concepts • The Network

• The Voice Signal

• Transmission Variables • Multiplexing • FDM Digital Concepts • Digital Signals • Advantages of Digital Technology • Digital Transmission

• Pulse Code Modulation

• Digital Voice Transport

• Optical Standards

• Digital Loop Carriers

Networks • Telecommunications Networks • The Flexibility of Computer Technology • Current Network Structure • The Exchange/Central Office • Cellular Networks • Internet Telephony

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Transmission

• A Simple Transmission Network

• What Are the

Transmission Media?

• Two-Wire Analog Media

• Multicircuit Media and Systems Signaling • Basic Types of Signaling • Supervisory Signaling • Start-Dial Signals • Address Signaling • Incoming Call Indication

• Call Progress Tones and Miscellaneous Signals • Common Channel Signaling • Signaling System 7 • Identifying the Signaling Interface Switching • Introduction to Switching • Analog Switches • Digital Switches • Time-Division Switching • Space-Division Switching • CO Digital Switches • Optical Signal Switching Application Analysis • Determination of Applications • Determination of Quantities

ComputerPREP Courseware

This learning guide was developed for instructor-led training and will assist you during class. Along with comprehensive instructional text and objectives checklists, this learning guide also includes pre-assessment questions, tech terms, and lesson summaries and reviews.

Each lesson in this course follows a regular structure, along with graphical cues to illustrate important terms and concepts. The structure of a typical module includes:

• Pre-Assessment Questions – Each lesson includes pre-assessment questions to test

student's understanding of the key concepts presented in the lesson.

• Objectives – Each lesson includes a list of objectives to set the stage for the rest of the

lesson.

• Tech Terms – All terms that are defined throughout the text appear in bold font. • Lesson Summary – The Lesson Summaries at the end of each lesson include: an

Application Project to extend learning, a Skills Review of key concepts and objectives presented in the lesson, and Lesson Review Questions designed to test understanding.

• Glossary – The Glossary contains a list of key terms defined throughout the course, and

can be used for self-study once the course has been completed.

• Table of Contents and Index – The Table of Contents appears at the beginning of the

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Course Objectives

• Define telecommunications.

• Identify the different types of network providers and their functions.

• Describe today's telecommunications environment.

• Describe how today's environment was shaped by the history of legal and business practices.

• Identify two key objectives of telecommunications systems.

• Describe the features and functions of station sets.

• Describe how today's environment was shaped by technological evolution.

• Describe the status of international telecommunications connectivity.

• Describe station sets and station set functions.

• Describe signaling methods used by station sets.

• Distinguish among key systems, PBX systems and Centrex.

• Discuss system features and their advantages.

• Discuss a breakdown of services into categories.

• Identify local services applicable to station sets, key systems, PBXs, and other customer-premises equipment.

• Identify the toll and long distance choices available and billing options.

• Discuss differences in options available from traditional and new carriers.

• Describe specialized services available from carriers.

• Identify the network processes that are common to analog and digital transmissions.

• Describe the characteristics of the analog voice signal.

• Describe the key transmission variables for the analog signal.

• Describe the most common method of multiplexing in analog transmissions.

• Describe how FDM works.

• Describe the characteristics of the digital signal.

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• Describe how digital technology works with analog technology.

• Describe how pulse code modulation (PCM) works.

• Describe standards of digital voice transmissions.

• Describe time-division multiplexing (TDM).

• Describe optical signaling and its application.

• Describe digital loop carriers (DLCs).Define dimensioning.

• Describe the problems of engineering the voice network.

• Define LATA.

• Differentiate between an area code and a LATA.

• Define interLATA.

• Describe how a phone number directs the path of a call.

• Differentiate between typical CO networks.

• Describe how a cellular network is organized.

• Describe how a cellular network handles a call

• Define Internet.

• Define Internet telephony.

• Identify the benefits of Internet telephony.

• Differentiate between the PSTN and the Internet as a voice carrier.

• Identify critical issues with Internet telephony.

• Identify the common steps in an Internet call.

• Define gateway.

• Define intranet.

• Discuss the use of VoIP for telephony by cable TV providers.

• Discuss how carrier systems are used in the PSTN.

• List the four media used to transport information.

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• Define carrier system.

• Distinguish between D4 and ESF framing in T carrier.

• Describe twisted-pair distribution in the wire center.

• Distinguish between bit rate and baud rate.

• Describe the SONET optical fiber standard.

• Describe subscriber signaling.

• Define interswitch signaling.

• Define in-band signaling.

• Define out-of-band signaling

• Define supervisory signaling.

• Describe how incoming calls are signaled.

• Describe call progress tones.

• Describe start dial signals.

• Describe interswitch supervisory signaling.

• Explain how the dialing process works.

• Describe pulse signaling.

• Describe DTMF signaling.

• Describe the North American Dialing Plan's address system.

• Define CCS.

• Identify the two main purposes of CCS.

• Describe a CCS network.

• Identify the functions of CCS in a voice network.

• Define signal transfer points (STPs).

• Define SS7.

• Describe the purpose for a signaling point (SP).

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• Define switching.

• Explain the evolution of analog switches.

• Describe digital switches.

• Differentiate between analog and digital switches.

• Define time-division multiplexing (TDM).

• Identify the structure of TDM.

• Define time division switching (TDS).

• Describe how time-division switches work.

• Define space-division switching (SDS).

• Differentiate between TDS and SDS.

• Explain how time- and space-division stages work in the same switch.

• Describe the status of optical switching.

• Describe important criteria in determining applications to be deployed.

• Describe the process used to discover application needs.

• Determine the traffic model used to determine circuit quantities.

Classroom Setup

Student computers are not required for this seminar course. If the instructor wants to deliver supplemental activities or quizzes electronically, computers that meet the instructor's needs will be required for each student. Otherwise, all supplemental material can be distributed as hard-copy documents and completed by students using a pen and paper.

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1 Lesson 1:

Overview

O

BJECTIVES

By the end of this lesson, you will be able to:

•

Define telecommunications.

•

Identify the different types of network providers and their functions.

•

Describe today's

telecommunications environment.

•

Describe how today's environment was shaped by the history of legal and business practices.

•

Identify two key objectives of telecommunications systems.

•

Describe how today's environment was shaped by technological evolution.

•

Describe the status of

international telecommunications connectivity.

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Pre-Assessment Questions

1. The two parts of the telecommunications network which together provide communications capability are CPE and:

a. The public switched telephone network. b. A competitive local exchange carrier. c. Switching.

d. The Internet.

2. A key public policy goal of telecommunications is: a. Maintaining a competitive environment. b. Universal service.

c. Federal and state regulation.

d. Separation of local and long-distance companies.

3. A key development which greatly decreased the cost of telephony was: a. T Carrier.

b. Satellite communications. c. The Internet.

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The Telecommunications Industry

Telecommunications today is the product of the evolution of technology,

business practice, and the law, dating back over 125 years in the United States. The forces that shaped the industry in the late 19th

century are still at work today. We are at another pivotal point in both technology and public policy that will shape telecommunications for decades.

This lesson examines the current state of the telecommunications environment, introduces concepts and terminology which will be used throughout this course, and provides an understanding of the forces at work. Later lessons will provide details about the demand for telecommunications systems and services, and the technologies and businesses that meet the demand. The telecommunications industry is one of the largest industries in the world. It has existed for

thousands of years; scholars have uncovered records dating from 3000 B.C. of signal fires used for long-distance communication. Telecommunications is communication at a distance (Greek telo), and this course will consider the industry as it evolved from sound (Greek phone) at a distance via the telephone.

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telecommunications

Communications at a distance.

Many different pieces of equipment make up the hardware upon which the industry is built. Many of them are in plain view in homes and offices, and some are hidden behind the phone jack in the wall.

Not all the items in the following figure actually plug into the phone jack in the wall. Newer technologies which allow for voice, fax or computer communication include the cable modem, the cell phone and the IP phone. Much of the course's content focuses on the telephone, but other ways of communicating will also be discussed.

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Growth in the United States

The media have widely reported that little growth is occurring in voice telephony, and that most of the opportunity is in data communications. More accurately, though, growth is occurring in voice telephony over wireline networks. A wireline network is the traditional telephone network, which connects to the telephone using a pair of wires. The growth in cellular telephony has been substantial, however, considering the sheer numbers of subscribers, and that the third generation of cellular systems will soon be introduced.

Figure 1-2: Growth in telephony since 1980

The data in Table 1-1 is from the United States market alone; it shows the magnitude of voice communications growth, and the split between cellular technologies and landline connections. The cellular number reflects the number of subscribers. The landline number reflects the number of lines in service; some subscribers have multiple lines. Figure 1-2 was created from the data in the table.

Table 1-1: Telephony growth since 1980

Year End

Landlines

Cell

Subscribers

Total

(Millions)

1980 102.2 <0.1 102.2

1985 116.0 0.3 116.3

1990 136.1 5.3 141.4

1995 159.7 33.8 193.5

2000 188.5 109.5 298.0

Rates are similar in Europe, where almost half of the traffic that travels across telephony lines is data, rather than voice. Although this data clearly illustrates growth in the cellular industry, the growth in landline telephony is less obvious. The growth in landline telecommunications has been created by the movement from a regulated monopoly environment to a deregulated, competitive

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Before the U.S. Telecommunications Reform Act of 1996, there were a large number of local exchange carriers (LEC), long-distance carriers, and cellular carriers. The long-distance carriers and cellular carriers were competitive, but the LECs each had a monopoly on local landline telecommunications in their territories, with only a few exceptions. The exceptions were companies called competitive access providers (CAPS).

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local exchange carrier (LEC)

A telco that provides telecommunications services within a limited geographical area (normally a metropolitan area as described by the census bureau).

The 1996 Act opened local telecommunications to competition, and many new companies were formed to enter that market. In 1995, the LEC competitors were only 2.2 percent of total providers; by 2000 they made up 17.2 percent. Today,

incumbent local exchange carriers (ILECs), competitive local exchange carriers (CLECs), and interexchange carriers (IXCs) all compete in

telecommunications markets.

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incumbent local exchange carrier (ILEC)

A local exchange carrier which enjoyed monopoly status before 1996 in its service area, and thus has dominant market share.

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competitive local exchange carrier (CLEC)

A local exchange carrier formed to compete with the ILEC in a particular area; had minimal market share in 1996.

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interexchange carrier (IXC)

A telco which carries long-distance calls between LECs in separate LATAs.

Figure 1-3: LECs share telecommunication markets with competitors

The growth of the competitive LEC industry created many opportunities for employment, for investment, and for the equipment manufacturers to sell equipment to build local networks. It also gave customers, particularly small businesses, telecommunications alternatives that were not available before.

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An examination of the magnitude of the revenues involved also shows why so many entrepreneurs want to be involved in telecommunications, and why the incumbents are interested in protecting their market share.

Figure 1-4: Telecommunications revenue distribution over time

Figure 1-4 shows revenues gained and lost in terms of percentages. The toll revenue number shows revenues which were earned by IXCs, and "local toll," which is largely in-state long-distance revenue earned by the ILECs. The CLEC numbers from 1995 include those competitive access providers which provided direct connections between business customers and IXCs, in competition with the ILEC.

From 1995 to 2000, the CLEC revenues went from U.S. $0.6B (0.3 % of the total) to $10.9B (3.8% of the total). At the same time, cellular providers went from $17.2B to $59.8B. Note that the holding companies that own many of the largest cellular companies also own the largest ILECs and IXCs. The total revenue earned by ILECs, CLECs, wireless, and toll providers in 2000 was $288.1B.

Terms and Technology

Since the early 1980s, in a business sense, telephony dealt with two different networks. One was made up of the equipment in the home or office building and was known as customer premise equipment (CPE).

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customer premise equipment (CPE)

All equipment on the customer side of the network. The subscriber rents or owns the CPE. Common CPE includes telephones, fax machines, PBX switches (i.e., exchanges), and so on.

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Figure 1-5: Demarc is connection point between CPE and PSTN

The other network was known as the public switched telephone network

(PSTN). The place where the two networks met was called the point of

demarcation, or the demarc.

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point of demarcation (demarc)

The piece of equipment on the customer's premises that marks the legal dividing line between the CPE and the PSTN.

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public switched telephone network (PSTN)

The portion of the dial-up switched telephone network that is not on a customer's premises, and is composed of the equipment owned by LECs, CLECs, and IXCs.

Customer Premise Equipment

On the customer's premises, the point of demarc is near where the telephone cables enter the building. On the premise side of the demarc, there is ordinarily an organized wiring plan that connects modular jacks to the demarc. In medium to larger business locations, the demarc is in an equipment room, which

typically houses the PBX and other common equipment such as DSUs.

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Most premises have a structured wiring plan, as shown in simplified form in Figure 1-6. Cables come out of the equipment room into wire closets. From the wire closets, cables are run to workstations. Most often, there are two modular jacks per workstation, one for voice, and one for data. They use 8-wire modular jacks and Cat 5 Cable.

Premise cabling has been standardized. The standardization includes not only the wire, but the connectors and patch panels used to interconnect the cables. The two most common wiring standards are Category 3, which is suitable for voice and 10-Mbps Ethernet connections, and Category 5, which is suitable for voice and 100-Mbps Ethernet. Level 1 was used for voice, Level 2 for 4-Mbps token-ring LANs, and Level 4 for 16-Mbps token-ring LANs.

Many locations are wired with one Cat 3 drop and one Cat 5 drop per

workstation. More recently, the trend has been toward 100% Cat 5. In addition, many larger companies interconnect the wire closets with fiber optic cable, to more easily support gigabit Ethernet backbone data networks.

The Public Switched Telephone Network

On the other side of the demarc is the PSTN. The PSTN is one global,

interconnected set of networks provided by public and private enterprises. The PSTN is made up of an access network, switches (i.e., exchanges), and

transmission networks to interconnect all the switches.

Access is the equipment that connects the CPE to the first switch in the network. For cellular providers, access is over radio. For wireline providers, access is provided over either copper cable or fiber-optic cable. Economics dictates that fiber-optic cable is used largely to connect to medium to large business locations, and residential and small business users are served by copper cable.

The purpose of deploying switches is so that every subscriber need not have a direct connection to every other subscriber. Subscribers are connected to switches over the lines that form the access network, while switches are connected together with trunks.

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line

A connection between a telephone set and a switch which can handle one conversation.

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trunk

A direct communication line between two switching systems, which can handle one conversation. A central office trunk is the line connecting a PBX and the central office. A tie trunk is the line connecting one PBX to another PBX.

Switches also provide concentration; a switch has more inputs(subscriber lines) than outputs (trunks). This arrangement is possible because only about one-sixth of the phones are actually in use at any given time.

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CLECs have one to a few switches in a city, whereas ILECs have many (30 to 50 in larger metropolitan areas). In the ILEC network, the switches are located in

wire centers, so called because the switch is located in the center of the wire

access network. Wire centers tend to be about 8 miles in diameter – smaller in downtown areas, larger in suburban and rural areas. A medium-sized city might have 30 wire centers, and the larger wire centers may have several switches. The building housing the switch is called the central office, or CO.

"

wire center

A central geographical area where all the access lines (wires) come together.

"

central office (CO)

Telephone company building where subscriber lines (local loop) are connected to switching equipment for local and long-distance telephone transmissions and other services.

Figure 1-7 illustrates three wire centers: Neighborhood A, Neighborhood B, and Neighborhood C. Each wire center has a switch in the CO that connects to the other switches.

Figure 1-7: Wire center houses switch that is connected to all other switches

A tandem is a switch that has trunks and not lines, and can handle only connection between switches. In Remote City is a fourth switch, called an

access tandem, which serves to allow an IXC's toll switch a single point to

connect to the ILEC network. All the local switches can be reached through the access tandem switch.

"

tandem

A switch that only has trunks and can handle only connections between other switches.

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access tandem

A particular application of a tandem switch. Each metro area contains at least one access tandem, which allows a single point of access for IXCs.

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transmission facilities include T carrier over copper cable, SONET carrier over fiber-optic cables, and digital radio.

The switches, the trunks, the transmission facilities and the access tandem have one thing in common: They are shared by all the users on the network. One of the challenges in providing wire line telephone service is the cost of the access portion of the network.

Access is the only part of the network that, for the majority of subscribers, is not shared. Although many CLECs have built fiber-optic networks to connect to businesses in cities, only the ILEC owns the copper cable that runs by most small businesses and residences, due to the cost.

The cost of running new copper cable to a residence or small business is a large barrier to entry for those who want to provide service to that market. This

barrier, or cost, is known as the last mile problem. The term "last mile" refers to the fact that the average length of that copper loop is about a mile.

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last mile

That part of the network that provides access to residences and small businesses, and is relatively costly to provide compared with the revenues derived from the service on that line.

Figure 1-8: Access connects CPE to network

In summary, only the ILEC has the capability to provide direct access to every premise. CLECs provide access only to larger businesses, cellular providers only to cell phones, and satellite or fixed radio carriers only to larger sites under special circumstances.

This situation is not likely to change soon, due to the magnitude of the last mile problem. Considerable capital is required to provide access, as is right of way. As the CLECs built their access networks, they began to encounter resistance from building owners, who were questioning how many holes were going to be drilled into their foundations to allow fiber-optic cables to come in, and municipal governments, who were questioning the wisdom of having streets excavated repeatedly to bury new fiber cables.

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Regulation and Public Policy

An industry as large as telecommunications has many stakeholders. Some want prices to be lower, and some want them to be higher. Most are concerned with their own constituencies, and presume that the other stakeholders will advocate their own positions.

Within the United States, two bodies are responsible for regulating some of the participants in the industry. At the federal level, the Federal Communications Commission (FCC) regulates the interstate aspects of telecommunications. Intrastate matters are left to the states, which have organizations often called public utility commissions (PUC).

Figure 1-9: The FCC regulates interstate communications

Historically, a certain amount of tension has always existed between the federal and state regulators. Other stakeholders include members of the industry, consumer and business groups, and customers. Politics enters in, particularly at the state level where local phone rates are set. Due to the international nature of telecommunications, international treaties and commissions are also involved in setting the environment in which the industry operates.

In the United States, two key goals of public policy have influenced industry development from the beginning. The means to achieve these goals are still debated among stakeholders.

• Interconnectivity – any phone should be able to dial any other phone. That is, all the networks are interconnected.

• Universal service – anyone who wants a phone should be able to get (and afford) a phone.

Standards

The setting and enforcement of standards is a key to achieving interconnectivity. Many different groups are involved in setting standards. Following is a partial list.

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Standards Organizations

! ANSI ! IEEE ! ITU ! ETSI ! ISO ! IETF ! Forums ! Consortia ! Telcordia

Figure 1-10: Standards organizations

• The American National Standards Institute publishes many of the American standards through its T1 committee, and is the U.S. representative on many international standards organizations.

• The Institute of Electrical and Electronics Engineers has been fundamental to developing LAN standards.

• The International Telecommunications Union is an arm of the United Nations, and is the primary international body negotiating

telecommunications standards.

• The European Telecommunications Standards Institute (ETSI) is the European Union's counterpart to ANSI.

• The International Organization for Standardization is the group that published the seven-layer OSI model for communications, and is instrumental in publishing quality methodologies.

• The Internet Engineering Task Force moderates Internet standard setting.

• Many forums are industry groups that have formed to promote a particular technology. They often produce "implementation agreements," which

function much like standards but without the legal implications of a formal standard. Examples are the Frame Relay Forum, the ATM forum and the VoIP Forum.

• Various industry consortia are industry groups that form to work out industry issues. The Telecommunications Industry Association (TIA) is an example.

• Last on the list is Telcordia, which is a private company descended from the part of Bell Laboratories which wrote many of the voice network standards, including the Network Equipment Building System (NEBS), which is

designed to create a safe working environment for equipment and people. Telcordia standards cover such issues as dial tone, how call waiting should work, voltage limits on E&M leads on trunks, and heat and humidity levels for central office buildings.

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Regulation

Regulation in the United States begins with the passage of legislation by Congress at the federal level, and by state legislatures at the state level. The Communications Act of 1934 created the FCC, which was charged to write the rules, or regulations. The telephone companies were required to publish tariffs, which document services provided by common carriers and the prices carriers charge for those services. State PUCs were created and followed a similar process. Federal and state tariffs covered interstate and intrastate

communications.

"

tariff

A document which contains the terms and conditions under which service is provided by a common carrier.

"

common carrier

A company which serves anyone who requests service under a common set of terms and conditions. Trucking companies and telephone

companies are common carriers.

Over time, regulation has been moving from a regulated monopoly environment where detailed tariffs controlled virtually all aspects of the companies'

businesses to an environment of more competitors. With this change, market forces regulate industry participants' behavior.

Figure 1-11: Current state of telecommunications industry regulation

Not all services provided by utilities such as telephone companies are regulated. In telephony, enhanced services and CPE are not regulated, as a result of FCC decisions made during the 1980s. Enhanced services are the primary growth services in telecommunications. Enhanced services include services such as voice mail and e-mail, where information is stored, and protocol conversion, where information is transformed.

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enhanced service

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With the increased competition of the 1990s, the FCC largely abandoned the tariff as a mechanism for managing long-distance pricing. State tariffs, which governed the price of local telephone services, are becoming less relevant because the state PUCs do not have staffs large enough to regulate all the new CLECs that have entered the marketplace.

To ensure that public goals are met, however, regulators are active in several areas. Federal and state regulators continue to examine actions of all parties to ensure that re-monopolization of currently competitive markets does not occur. And the federal and state regulators are still active in making sure that

emergency services, such as 911 emergency assistance services (or, in Great Britain, 999), continue to work properly.

Finally, in order to continue to support the goal of universal service, a Universal Service Fund (USF) has been established to subsidize basic telephone service for disadvantaged groups. All carriers contribute to this fund. This fund is intended to allow the ILECs to price local service more closely to cost, which will

ultimately result in competition for local phone service even to residential customers.

Historical Perspective

To understand the legal and business positions taken by industry stakeholders in the United States, some knowledge of the key events which have shaped public policy is essential. These events are best viewed as a struggle between groups who want unfettered competition, groups who want monopoly power and protection, and groups who want inexpensive service.

Western Electric Bell Labs ATT SWBT, etc. MB, etc. NYT, etc. NT Lucent Agere Telcordia Bell Labs ATT WCOM Sprint SBC VZ BS Quest CLECs Cell 1870s to 1980s Building the Bell System

1980s to Today Pulling it apart...

Figure 1-12: Telecommunications industry monopolization and demonopolization

This same paradigm applies to most countries. Key events in the history of the telecommunications industry in the United States are as follows:

• In 1876, Bell applied for and received a patent for the telephone. Bell obtained the exclusive rights to this invention for 17 years. Bell companies were formed and many local networks were built. Long-distance service began. Although many challenge the patent, Bell prevailed.

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• Bell's patent expired in 1893. Many companies began building networks. Bell

responded in some cases by refusing to interconnect its network with the new companies' networks (thereby forcing some businesses to subscribe to both networks) and by buying its competitors. The federal government brought antitrust actions.

• The Kingsbury Commitment occurred in 1913. The U.S. government left Bell companies intact. In return, Bell companies agreed to stop buying

independent companies, except with Interstate Commerce Commission approval, and to allow interconnection between its networks and the networks of the independent companies.

• The Communications Act of 1934 was signed, forming the Federal Communications Commission. This act signaled the birth of modern telecommunications regulation. Bell companies dominated the industry, building their own equipment through the Western Electric subsidiary, and built international networks. Western Electric, in addition to telephone equipment, made washing machines and movie sound systems. Questions arose as to whether ATT subsidizes competitive Western Electric products by paying abnormally high prices for equipment needed by its monopoly Bell Telephone subsidiaries. Antitrust activity began again in 1949.

• The Consent Decree of 1956 was signed. The antitrust case was settled when ATT agreed to divest itself of international companies, and to limit Western Electric to manufacturing only telecommunications equipment. Western Electric left the other businesses, and agreed to license its patents, at reasonable rates, to other companies.

At the end of its first century, the Bell System, headed by ATT, served more than 80 percent of the nation's telephone subscribers, from 23 operating telephone company subsidiaries, and also owned Western Electric and Bell Laboratories. ATT carried essentially all U.S. long-distance traffic.

The Bell System was built during this time. Concurrently, more than 1,800 independent telephone companies were formed in non-Bell territory. The largest of these was General Telephone and Electric (GTE), which also had a

manufacturing subsidiary. United Telephone was another large independent company.

As newer technologies were developed, the FCC intentionally ensured that ATT did not have a monopoly in them. ATT was specifically prohibited from owning and operating satellite communications systems, and half of the cellular telephone licenses were granted to non-Bell companies.

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Figure 1-13: Telecommunications industry regulation before 1980s

As the 1980s began, wire line telephony was still a regulated monopoly. Satellite communications and cellular service were not monopolies, and were somewhat more loosely regulated. The FCC and Congress were under increasing pressure to change the nature of the industry. Users wanted services they could not get. Manufacturers wanted additional business opportunities.

The technology had changed so that making telecommunications equipment was easier. The distinction between telecommunications equipment, which ATT's Western Electric subsidiary equipment was allowed to make, and computing equipment, which Western Electric was forbidden to make, became blurred. In addition, courts had ruled that the FCC could not prohibit non-Western Electric equipment from being connected to the Bell network.

The FCC attempted to resolve the questions through an inquiry called the Computer Inquiry (later called Computer Inquiry I, or CI-I). Following are two key decisions related to Computer Inquiry:

• The CI-I decision, in 1971, was issued by the FCC. Although it was intended to draw a line between communications and data processing, its largest consequence was a decision that allowed competitors' CPE to be connected to Bell lines without the previously required "protective coupling device." The FCC set up an equipment registration program, defined the RJ-11 jack, and opened the CPE market to competition in the process.

• The CI-II decision, in 1980, defined enhanced services. Bell companies were to be allowed to provide enhanced services, but only through a fully separate subsidiary, to ensure that basic monopoly revenues were not used to

subsidize enhanced services. Similarly, the Bell System was required to provide CPE through a fully separate subsidiary.

While the struggle continued over provision of CPE and data services, MCI and other competitive distance carriers had forced an opening of the long-distance market. The result of the struggles was another antitrust case, which resulted, in 1982, in a modification of the 1956 consent decree. This was called the Modified Final Judgment, or MFJ.

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A key finding that led to the MFJ was that the Bell companies, through their control of local network access, had an unfair advantage over other long-distance providers. Following is a description of the impact of MFJ:

• In 1984, the MFJ was implemented. It required ATT to divest itself of the local telephone company subsidiaries, the LECs, which were organized into seven holding companies called the Regional Bell Operating Companies (RBOCs). The RBOCs own the LECs, along with other subsidiaries such as CPE providers and Yellow Pages directory companies. The RBOCs, which have an effective monopoly over local access, were prohibited from providing long-distance service and from manufacturing. They could provide CPE only through separate subsidiaries. ATT, which no longer had any monopoly power, could enter any business it wanted to.

The intent of the MFJ was to regulate the companies who had control of access, and to deregulate everyone else. The LECs were restricted from carrying

telephone calls outside their local access transport area (LATA), which was a geographical area roughly equivalent to a Census Bureau standard

metropolitan statistical area (MSA). Calls beyond the LATA had to be carried

by the IXCs, who were to be given equal access to the LEC local networks.

"

metropolitan statistical area (MSA)

A term used by government agencies and other organizations that divides the United States into 306 areas according to population density. Cellular contracts are awarded by MSA.

GTE also had control over access in the geographical areas where it had the local telephone service monopoly, and was subject to many of the same regulations as the RBOCs.

Telco Switch IXC Switch Telco Switch Access Access Regulated Not Regulated Beginning of 1990s

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After 1984, most customers dealt with three companies for telecommunications: a CPE provider, an LEC for local service and an IXC for long-distance service. This situation was still unsatisfactory for a great many stakeholders. Some wanted to be able to provide local telephone service in competition with the RBOCs. The RBOCs, in turn, wanted to be able to provide long-distance service and to move out of their restricted territories. The result was compromise legislation. Following is a description of the impact of the Telecommunications Reform Act of 1996:

• The Telecommunications Reform Act of 1996 was intended to begin

competition for local telephone service. Recognizing that the cost of access, particularly for residential and small business subscribers, was a barrier to entry for new companies, the Act required the FCC to set up rules to allow new competitors (CLECs) to use pieces of the ILECs network for a fair price. After it was proved that local exchange competition existed, the ILEC would be allowed to enter the long-distance market. This decision would occur on a state-by-state basis.

Telephony has now been largely deregulated. Recognizing that local access is still a major barrier to entry for new competitors, ILECs are required to provide access to their networks under two different mechanisms. One is called an "unbundled loop" which is priced according to agreements between the parties and ratified by the regulators. A second mechanism is through the provision of "unbundled network elements" which have been decided between the ILECs and the regulators and made available then to competitors.

The term "unbundled loop" means that the loop is provided without any other telephony services, such as switching, dial tone and so forth. The term has more recently been translated as "voice-grade unbundled loop," meaning that the performance is guaranteed only for voice-grade traffic. Unbundled network elements implies that other pieces of local access and switching can be provided, such as switching and local transmission, through the same pricing and

ordering mechanisms.

Figure 1-15: Telecommunications industry regulation — 2000s

At the beginning of the 21st

century, the recognized and regulated monopoly part of the network is the local loop and some elements of local switching. Virtually all other telecommunications services have been left to regulation via

competition in the marketplace. The ILECs have largely realized their goal of being able to reenter the long-distance market.

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The struggles have not ceased, however, but are moving into other arenas. Because enhanced services were never regulated (from CI-I, CI-II, and the MFJ), if an ILEC can convince regulators that most aspects of DSL service are

enhanced, that means DSL service should be unregulated, and the ILEC need not provide access to DSL transport for resale by competitors under the 1996 Act.

Similar struggles are going on in cable television, because cable also offers "last mile" connectivity to residences and small business, and cable operators are offering telephone service and high-speed Internet connectivity. Clearly, the telecommunications marketplace will remain fluid for the foreseeable future.

Technical Platform

The technical evolution of the telecommunications network occurred in three stages. In the first stage, the organizations and devices that enabled a network to be built were invented. At this stage, telephones were only for customers with significant wealth or a great need for immediate voice communications.

Figure 1-16: Early development of telecommunications technology

The next set of innovations continuously reduced the cost of telephony and met the goal of universal service. The stored program control switch was essentially a computer-driven switch. It was called a stored program control switch because it was made by Western Electric, which was prohibited from making computers. Following are developments that have reduced the cost of telecommunication access:

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Figure 1-17: Stored program control switch reduced telephony costs

Before the development of the stored program control switch, the switches were controlled by electromechanical relays, and the introduction of new services, or just new area or central office codes, required massive re-wiring. These changes are now accomplished in software rather than hardware.

Even though the provision of services during this time was growing rapidly, and services were provided by a monopoly, prices still dropped and there was

considerable innovation.

Innovations which may most change how we use telecommunications were not part of wireline telecommunications itself, but were enabled by it. Following are three key developments in telecommunications:

Figure 1-18: Mobile telephones and Web browsers changed telecommunications

Mobil phone networks interconnected with the landline networks, and made use of the same switching and transmission technologies. The development of the Web browser has made Internet use almost as simple as telephone use, thereby opening the Internet to a larger audience, and helping power the growth of the Internet. And the Internet itself ran largely over the fiber optic transmission facilities built by the telephone industry.

All the technologies have begun to merge. Cell phones now offer Internet access. After the telecommunications service is brought into the home or place of business, often it runs over a local radio technology to reach the phone or computer.