The Internet and the Public
`Switched Telephone
`Network
`Disparities, Differences, and Distinctions
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`This paper discusses the telephone network infrastructure commonly known as the Public
`Switched Telephone Network (PSTN) and provides insight into fundamental differences between
`the "traditional" telecommunications network and the Internet. The Internet has evolved from a
`research computer network to a vibrant communication platform, based on competition, regulatory
`independence and transparency, and continuous innovation. Today a significant amount of the
`world’s voice traffic travels over IP-based networks and the Internet. However, legacy PSTN
`regulations cannot be transferred or applied directly to the Internet, as there is little commonality
`between it and the PSTN.
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`Public Switched Telephone Network (PSTN)
`The Public Switched Telephone Network was designed to facilitate ubiquitous two-way voice
`communication. Initially, establishing a direct connection between any two points or users was
`almost as simple as stringing wire between those points and placing telephones on either end.
`The cost of this connection was largely a function of the location of each endpoint or end-user and
`the distance and the geography between the two points; cost increased with an increase in
`distance and decrease in accessibility.
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`Over time the telephony network evolved to support more users and endpoints through a network
`of switches. Engineers capitalized on the point-to-point nature of telephony network architecture
`and the fact that one end user can could only be connected to one other end user at a time. By
`placing switching equipment in centralized locations, network engineers were able to interconnect
`large numbers of end users via these switches to maximize network access; thus the concept of
`circuit switching was born. This revolutionized voice communications and telephony network
`design, creating the Public Switched Telephone Network (PSTN) architecture that is still in place
`today. The network focus is on circuit-based, or connection-oriented, systems designed for
`delivery of one universal service – voice. Essentially, this established a system in which each
`usage of the network required a “call-setup” phase in which a connection was set up end-to-end or
`between both endpoints and end users, reserving the required resources along the path for the
`duration of a call whether the network resources were used or not. This system allowed the
`network operator to efficiently route and bill for the calls because each step of the call path is
`identified and managed by the network and its switching systems.
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`The diagram above shows that by arranging telephony network switching offices in a hierarchical
`fashion by the function that they performed and employing dedicated trunk lines between the
`networked switches, it was possible to scale the telecommunications network to accommodate a
`large number of end users as traffic was managed between the various switching offices
`depending on the type of traffic that was to be connected: local traffic, long distance traffic and
`international traffic.
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`PSTN switches operate on a link-by-link basis: each switch within the hierarchy forwards its traffic
`along the link or hop to the next PSTN switch based on the call setup process.
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`Importantly, in order to establish arbitrary connections, intelligence had to be placed in the
`network. Initially operators made physical connections for customers followed by stepper switches
`that could connect end users based on telephone number prefix, and eventually digital switching
`using stored program control systems (i.e., computers) was introduced to add intelligence to the
`network for service management. Whether through manual, electro-mechanical, or digital means,
`the PSTN operates on the basis of having type or class identified for each line in service (e.g.
`Business or Residential), carefully engineered interconnection arrangements between operators,
`networks and switches, with service provisioning provided solely by its network and closed
`operator group. This PSTN structure provides network operators the ability to physically measure
`service between end users and through this mechanism, to charge customers, to exchange
`interconnection settlements and to recover network capital costs.
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`The Internet
`The Internet is a both a transit network that moves data and a network of computers, which allow
`anyone to access, retrieve, process, and store all manner of information in digital format (e.g.
`voice, video, documents, images). In Internet Protocol based (IP) networks, multiple independent
`computer networks are joined together into a network of networks through interconnected
`gateways or routers using a standard protocol suite –Transmission Control Protocol/Internet
`Protocol (TCP/IP) for interworking. Internet traffic has no dedicated path; there is no single
`interconnection point or fixed network hierarchy as employed in the PSTN; and there is no
`dedicated settlement and billing regime. In fact, PSTN-style telecommunication accounting is
`impossible to apply to the Internet because individual data packets may take different routes over
`separate networks as they travel to their final destination to be reassembled and delivered to the
`application.
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`Where telephony relies on physical, point-to-point connection, and switch hierarchy, the Internet
`does not prescribe topology, but rather simply seeks to deliver data. In this highly distributed
`communications system, data is placed in packets with an IP destination address and an IP
`source address, much like the “TO” and “RETURN” addresses on a postal envelope. Each packet
`is then placed on the network where it is delivered to its destination. In the simplest case, a single
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`network connects two computers. In more complex (and more common) cases routers and
`gateways establish the exchange of traffic among and between many networks. Regardless, the
`endpoints are unaware of network or interconnection complexity and take no special action as a
`consequence. This is unlike the PSTN, where the telephone number must be known by the user in
`order to establish a connection and the path for the entire communication is decided during the
`connection setup.
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`The Internet was developed such that the packet transport and network routing mechanisms are
`neutral with regard to the application traffic carried by the packets, making it a very general-
`purpose network. This has allowed competition and tremendous innovation by end-users. With the
`Internet, innovation at the edge of the network is not dependent on network providers for anything
`other than transporting packets across their domains. In the Internet it is possible for any user to
`connect to it, build new parts of it, and study it overall. In the Internet, no one is just a consumer of
`content or services, but anyone can be a contributor – produce content on existing services,
`invent new applications or services, put up a server (an Internet node), and connect new
`networks.
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`Critical Comparison of the PSTN and the Internet
`The unchanging properties of the Internet system have included features of the underlying
`networks, technologies and standards, as well as emergent properties that impact users and uses
`of the Internet. These can be compared and contrasted with the PSTN.
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` •
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` Global Reach
`Internet: Any endpoint of the Internet can address any other device or endpoint connected to
`it, without any requirement for a call-setup phase. The specific path of the packet flow between
`the endpoints and thus, the intermediaries, is not prescribed and can dynamically change, or
`be different for parts of the flow, since it is a meshed topology. There are no geographic
`boundary limitations – many enterprises have nation-spanning networks as part of the Internet.
`Moreover, the Internet looks and acts the same from anywhere a user connects to it.
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`PSTN: While the PSTN has a global footprint, connection between two (2) endpoints requires
`intermediation through a specific control point in the hierarchical switching system.
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`• General purpose
`Internet: Capable of supporting a wide range of demands for its use. While some networks
`within it may be optimized for certain traffic patterns or expected uses, the Internet service
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`provides a best effort forwarding of data packets which does not place inherent limitations on
`the applications or services that make use of it.
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`PSTN: Optimized for voice services as defined and globally agreed for deployment.
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`• Supports innovation without requiring permission (by anyone)
`Internet: Any person or organization can set up a new service that adheres to open and
`collaborative standards, and make it available to the rest of the Internet, without requiring
`special permission. The best example of this is the World Wide Web – which was created by a
`researcher in Switzerland, who made his software available for others to run, and the rest, as
`they say, is history.
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`PSTN: Only telecoms companies can define and deploy new services within their networks.
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` •
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` Accessible
`Internet: It’s possible to connect to it, build new parts of it, and study it overall: Anyone can
`“get on” the Internet – not just to consume services, but also to contribute applications and
`services, and attach new networks.
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`PSTN: Limited to licensed telecoms providers, and restricted by technical complexity, as well
`as through geographic boundaries of regulatory regimes.
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`• Based on interoperability and mutual agreement
`Internet: Networks exchange traffic based on simple non-formal agreements and open
`standards for interoperability. The basis for the exchange is the “Internet service” – best effort
`forwarding of packets from source to destination.
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`PSTN: Connections are made based on bilateral agreements and standards that have been
`authorized by regulatory authorities.
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`• Collaboration
`Internet: The defined Internet standards development paradigm seeks the best solutions to
`new issues that arise from willing collaboration between stakeholders. These are sometimes
`competitive business interests, and sometimes different stakeholders altogether (e.g.,
`technology and policy).
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`PSTN: Regulation defines the requirements for cooperation, as well as the boundaries
`separating roles.
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`• Technology
`Internet: Reusable building blocks: Technologies have been built and deployed on the Internet
`for one purpose, only to be used at a later date to support some other important function.
`Furthermore, operational restrictions on the generalized functionality of technologies as
`originally designed have an impact on their viability as building blocks for future solutions.
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`PSTN: Vertically integrated, closed solutions, whose purposes have been defined, and
`technology specified strictly to achieve those defined purposes (services).
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`• Legacy Systems
`Internet: There are no permanent favorites. While some technologies, companies and regions
`have flourished, their continued success depends on continued relevance and utility, not
`strictly some favored status.
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`PSTN: Stability of the network is core to the PSTN’s health and functioning. Innovation is
`restricted by defined requirements to support existing network components and billing
`requirements, with existing requirements defined and controlled by network operators who are
`more focused on regulatory recovery than modernization.
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`• Network Planning and Growth
`Internet: Historical data or estimated traffic growth on links or parts of the network is used for
`deciding the installation of additional capacity. Different type of end-points connected to the
`network will have completely different traffic profiles, so it’s meaningless to calculate an
`average usage for any connected endpoint on the Internet.
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`PSTN: Functions with mathematical and statistical foundations are used to determine the
`capacity requirements and configuration of equipment based on the amount of connected
`users.
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`• Costs and Prices
`Internet: The service providers must calculate their costs based on overall network operation
`expenses and investments. The price paid by a connected endpoint, enables it to send and
`receive packets through any link, interconnection or gateway available on the network.
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`Internet Society
`Galerie Jean-Malbuisson, 15
`CH-1204 Geneva
`Switzerland
`Tel: +41 22 807 1444
`Fax: +41 22 807 1445
`www.internetsociety.org
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`USA
`Tel: +1 703 439 2120
`Fax: +1 703 326 9881
`Email: info@isoc.org
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`www.internetsociety.org
` bp-internetPSTN-201206-en
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`PSTN: The costs can be isolated and associated with individual calls. The telecommunications
`providers can establish settlements for individual interconnection links charging each other
`based on their users’ calls. The users can pay based on each requested call and the calling
`user will take care for all the costs involved to establish each call.
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