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McGraw-Hill Companies, The
The Irwin Handbook of Telecommunications / Edition 4

The Irwin Handbook of Telecommunications / Edition 4

by James Harry Green, James Harry Green


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Product Details

ISBN-13: 9780071355544
Publisher: McGraw-Hill Companies, The
Publication date: 02/17/2000
Edition description: Older Edition
Pages: 844
Product dimensions: 7.94(w) x 9.54(h) x 2.43(d)

About the Author

James Harry Green is a veteran telecommunications consultant and author, with decades of hands-on experience in network planning, design, and management services in voice networks, data networks, and call center systems. Green is the author of a number of books and articles and books on telecommunications, including The Irwin Handbook of Telecommunications Management. He can be contacted at

Read an Excerpt

Chapter 1: A Brief History ofTelecommunications

The first century of telephone development was uninspiring, controlled by a staid Bell System that drove vehicles that were painted a slightly different shade of green than army trucks. Technological progress was slow, but service was stable and predictable. Government regulation was designed with low cost and universal service in mind. The FCC and the Bell companies negotiated depreciation rates for equipment in a process that tended to keep equipment in service until long after it was technologically obsolete. Even though the telephone industry began with wide-open competition, the principle of regulated monopoly served well in America as an alternative to the government ownership that prevailed in most of the rest of the world.

Then, in a series of court cases, AT&T's monopoly collapsed, and the result reverberated around the world as postal, telephone, and telegraphs (PTTs) gradually privatized their telephone systems to keep pace. Not coincidentally, the collapse of the monopoly coincided with the rise of the semiconductor industry. No longer was the design and manufacture of telecommunications equipment specialized. The electromechanical apparatus that served the industry for its first century was displaced by equipment that shares its technology with the computer industry. Half of the companies producing telecommunications equipment today weren't even formed when the first edition of this book was published in 1986. The Internet was the exclusive terrain of a selected group of users and experimenters, and most of today's transport control protocol/ internet protocol (TCP/IP) experts hadn't even heard that term then. In 1986 a router was something you used to gouge holes in wood, and a bridge was used for crossing streams.

If someone were setting out today to build a new telecommunications infrastructure, it wouldn't much resemble what we have in place. The industry has well over a century of history, and several key events during that time have shaped the industry into the structure it has today. Governments have by no means been passive participants. In most of the world the government owns most, or all, of the telephone system, operating it as part of PTT operations. In most of North America ownership has been private, except for a short time during World War I when the U.S. government nationalized the telephone system. Nationalized telecommunications systems are now rapidly becoming a thing of the past. Governments are recognizing that their information systems must be freed from the sluggish responsiveness that often results from public management. Consequently, many of the major European and Asian economies have either privatized their telecommunications systems or are in the process of doing so.

In this chapter we will examine the major events that have shaped telecommunications as it is today. Much of this will focus on the United States, which has led the rest of the world in information system and telecommunications development. We will also look at some of the standards and regulatory agencies that develop and promulgate standards and otherwise shape the industry.

A Short History Of The Bell System

No organization in the world has influenced telecommunications to the degree that the Bell System did. The Bell System traced its roots back to Alexander Graham Bell's invention of the telephone in 1876, and survived for nearly 110 years until the Department of Justice broke it up in 1984 following a protracted antitrust case. For six decades prior to the 1984 dissolution of the Bell System, American Telephone and Telegraph Company (AT&T) operated as a regulated monopoly, but it wasn't always so.

The early days of the telephone were characterized by freewheeling and open competition. Following expiration of Bell's patents in 1893, small companies cropped up in every locale to provide switching services. The process was manual, handled from switchboards such as the one shown in Figure 1-1. Subscribers signaled the central office by lifting the receiver or turning a crank. The operators recognized the request for service by a lighted lamp on the switchboard or a magnetic flap that dropped down when ringing current was detected. By the turn of the twentieth century, some 4000 independent telephone companies served the United States, representing about 40 percent of the telephones in the country. AT&T, which was incorporated in 1885, owned the rest. During the first 35 years following Bell's invention of the telephone, AT&T acquired franchise rights to provide telephone service in most of the metropolitan areas of the United States.

The Principle of Regulated Monopoly

Finally, concerned about AT&T's monopolistic tactics, the Department of justice stepped in. In 1913 AT&T signed an agreement with the Department of justice that it would refrain from purchasing any more independent telephone companies. This agreement, called the Kingsbury Commitment, left the country with the configuration that persists today: a core metropolitan area in most major cities that traces its roots back to the Bell System. A non-Bell company often serves the suburban areas. In 1918, in the middle of World War I, the federal government nationalized the Bell System. For a brief 1-year period, the nation's telephone system was under government control. The AT&T president at the time, Theodore N. Vale, proposed to the government the principle of regulated monopoly. In exchange for freedom `to retain the telephone system in private ownership, Vale agreed to submit AT&T and its operating companies to government regulation. The theory was that utilities, such as water, electricity, and telephone, were natural monopolies. The public interest would not be served in having duplicated facilities because the additional investment required would drive prices up. Furthermore, utilities rely on the public right-of-way to deliver service, and the needs of the public are not well served by having multiple utilities digging up the streets and installing pole lines.

At the conclusion of AT&T's negotiations with the government, the principle of regulated monopoly was established as an alternative to government ownership, at least in the United States and most of Canada. Regulation was divided into two parts. The Interstate Commerce Commission regulated the interstate portions of telephone service while the intrastate elements were left to the states. Some states formed statewide regulatory agencies, while others left regulation to municipalities.

ICC regulation continued until 1934, when Congress passed the original Telecommunications Act. This act, among other provisions, established the Federal Communications Commission, and gave it responsibility for regulating interstate communications. In addition, the FCC was charged with regulating the use of the airwaves.

Universal Service and Subsidies

It is important to understand that, during this period of regulation, the operation of the nation's telephone system was driven by a quest for universal service. The value of every telephone, the argument went, was enhanced by the number of telephones that could be reached. It was logical, therefore, for urban users, where the cost per subscriber was low, to subsidize high-cost rural users. Also, it was logical for basic service rates to be kept low and to be subsidized by optional services. The method of pricing services was pegged to the value to the subscriber, and had little to do with the carriers' cost of providing it. Under regulation, the telephone companies and the utility commissions shared several joint objectives. For one, the cost of basic service would be held to a minimum, with revenues made up through discretionary services. Since a large portion of the carriers' expense was depreciation, the regulatory commissions had every incentive to keep this expense low, which they could do by extending the service life...

Table of Contents

Part One: Principles of Telecommunications Systems.Chapter 1: A Brief History of Telecommunications. Chapter 2: Introduction to Voice Communications. Chapter 3: Introduction to Data Networks. Chapter 4: Data Communications Principles. Chapter 5: Pulse Code Modulation. Chapter 6: Outside Plant. Chapter 7: Structured Wiring Systems. Chapter 8: Data Communications Protocols. Chapter 9: Local Area Network Principles. Chapter 10: Common Equipment. Part Two: Circuit Switching Systems. Chapter 11: Signaling Systems. Chapter 12: Circuit Switching Technology. Chapter 13: Local Switching Systems. Chapter 14: Tandem Switching Systems. Part Three: Transmission Systems. Chapter 15: Lightwave Communications. Chapter 16: Microwave Radio Systems. Chapter 17: Satellite Communications. Chapter 18: Mobile, Cellular, and PCS Radio Systems. Chapter 19: Wireless Communications Systems. Chapter 20: Video Systems. Part Four. Customer Premises Equipment. Chapter 21: Local Area Network Equipment. (and more...)


As one who has worked in this industry for about a third of the life span of the telephone, I find the rate of technical progress fascinating. Following the invention of the telephone, a few milestones resulted in a major shift in the direction of telecommunications. In 1891, a Kansas City undertaker named Almon B. Strowger invented the first dial-controlled telephone switching machine, which ushered in the beginnings of automation. Lee DeForest's invention of the vacuum tube in 1906 led to repeaters and carrier telephony, which enabled telephone conversations to span continents and oceans. Electronic switching in 1965 near the end of telephone's first century marked a major breakthrough. For the first time, a computer program instead of electromechanical relays and switches controlled calls, and new features could be installed by upgrading a program instead of rewiring the central office. Ironically, at the time the first electronic switching system went into effect, the Bell System still had manual cord boards in operation-Strowger's invention didn't always cost justify itself in rural areas where the telephone exchange could still be operated manually.

Before the breakup of the Bell System, telecommunications was in a technology-push situation rather than demand-pull. Most developments originated in the Bell Labs and were released to the field only after they were thoroughly tested. Development cycles of 4 or 5 years were not uncommon. Then in the late 1970s came a fabulous development that is invisible to most people, but which has revolutionized telecommunications: fiber optics. Bell Laboratories did most of the research on fiber and the lasers that make information transferpossible, but other companies rapidly picked up on the technology, and demand exploded. Fiber optics was probably the first real demand-pull product that hit the telecommunications market. Fiber optics is still, by far, the most dynamic and influential of all the telecommunications technologies. In a little more than two decades, strands of fiber have girdled the world and its capacity is practically unlimited. Production equipment can reach speeds of 10 gigabits per second (Gb/s) now, and that is still not the top limit. Dense wavelength division multiplexing divides the medium into 40 different "colors," each capable of carrying a 10-Gb/s signal. Undersea cables have, for all practical purposes, replaced satellites as transcontinental telephone media, but satellites are experiencing a new rebirth with low earth-orbiting vehicles that eliminate the delay inherent in geosynchronous devices. These make it possible to place a telephone call from virtually any place on the face of the earth.

New technology has flourished since divestiture, but perhaps a better indicator of the wisdom of the consent decree that broke up the Bell System is the fact that all parties remained dissatisfied. The regional Bell Operating Companies chafed at the long-distance restrictions the agreement imposed upon them. The interexchange carriers (IXCs) complained about access charges, which they deemed excessive, and a host of would-be competitors complained about the local monopoly. Congress entered the picture and, responding to multiple pressures, created the Telecommunications Act of 1996. The act uses both carrots and sticks to reshape the local telephone market from government regulation to competition. At the time `this is written, the Telecommunications Act has resulted in few of its intended outcomes. Business subscribers in larger cities all have options for local dial tone provided they purchase enough lines to make it worth the while of competitive local exchange carriers (CLECs) to serve them.

Few residences have a choice of telephone service, but they are still saddled with increased costs. The Telecommunications Act requires carriers to contribute to a Universal Service Fund to subsidize rural and low-income consumers. Congress decided that schools, libraries, and rural health care organizations were also entitled to subsidies. The carriers passed their increased costs through to consumers in the form of surcharges and directly allocated costs, even while they were enjoying reduced access charges. The act required that local telephone numbers be portable between carriers, the costs of which are being pushed directly onto consumers who don't even enjoy the possibility of reduced rates from competitive carriers. The impact of these regulatory fiats has been negative for most consumers even though it may prove beneficial in the long run.

Mergers and acquisitions have changed the landscape in ways that we can't begin to grasp yet. The seven regional Bell Operating Companies have dwindled to four-probably three by the time you read this. GTE will merge into Bell Atlantic, which already has absorbed Nynex. Southwestern Bell has assimilated Pacific Telesis and Ameritech. US West announced its intention to join in a "union of equals" with Global Crossings, a Bermuda-based firm that has a corporate history stretching all the way back to 1997. Global Crossings has already acquired Frontier Communications and the undersea cable operations of Cable and Wireless, a British firm. Before the deal could be consummated, Qwest, another newcomer to the industry, offered a more attractive proposition. As this is written, regulatory approval is still pending. After flirting briefly with British Telecom, MCI, which was a major player in triggering the collapse of the Bell System, allowed itself to be acquired by WorldCom, another corporate newcomer. The MCI WorldCom combination, which is the second largest IXC in the United States, is attempting to get approval to aquire No. 3 Sprint.

AT&T, which fought to keep its manufacturing and customer premises equipment business intact at divestiture and then launched a hostile takeover of NCR, suddenly dismantled its empire of its own volition. After setting free NCR and spinning off its manufacturing operations into Lucent Technologies, AT&T then set about to acquire Teleport Communications Group, a competitive local exchange carrier, and TCI and Media One, two of the country's largest cable providers, with the announced intention of delivering Internet and telephone services over cable. On the European continent, Deutsche Telekom and Telecom Italia have joined forces. Will all of these mergers and acquisitions work to the benefit of the users? The room for doubt is more than ample.

Much has been written about the convergence of voice and data. Accompanied by loud fanfare, products are beginning to appear, but the technology is yet in its infancy. A host of other products is appearing on the horizon and potentially will further alter the shape of telecommunications, but it's too early to tell. Wireless has the potential to break some of the stranglehold that the incumbent local exchange carriers (ILECs) have by virtue of their cable plant. At the same time, the ILECs are attempting to deploy a variety of digital subscriber line techniques to relieve some of the bottlenecks users experience in accessing the Internet. Cable companies, led by AT&T's acquisition of TCI, hope to grab some of the market for both dial tone and Internet access as they upgrade their older coaxial systems to fiber optics.

Another dramatic development was the cell phone, which happened about the same time as fiber optics. The development cycle of this product was astounding: the concept was born in 1947-before it was technically feasible. The Bell System demonstrated its feasibility in the 1970s, but the FCC camped on it for years, reluctant to grant the airwaves to a monopoly. Finally, they settled on a duopoly. Half of the frequency spectrum was awarded to the traditional wireline carrier in each market. The other license was granted to competitors for the asking. As cellular hit the market, demand exploded and the cost of cell phones dropped, but the legislated competition didn't do much else for the consumer. The FCC learned from its mistakes and divided the market more intelligently with personal communications services (PCS). Instead of a duopoly, the band is divided into six segments, and the FCC auctioned off the spectrum.

The Internet itself is nothing short of phenomenal, and it is just getting started. It is sparking not only information and entertainment pastimes, it is also fueling a whole new way of doing business, and offering ways for companies to link themselves together by building secure tunnels through a chaotic and insecure network.

All of this makes plenty of grist for a book that has the aim of helping people to make sense of the confusion. With the possible exception of health care, no other industry in the world has undergone such a radical and wrenching change in the past 20 years.

And more is yet to come.

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