The Internet and the Public Switched Telephone Network

Disparities, Differences, and Distinctions

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 worlds 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. 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. 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. 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. 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. 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. 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 2 www.internetsociety.org

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.

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 generalpurpose 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. 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. 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. 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. 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 3 www.internetsociety.org

provides a best effort forwarding of data packets which does not place inherent limitations on the applications or services that make use of it. PSTN: Optimized for voice services as defined and globally agreed for deployment. 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. PSTN: Only telecoms companies can define and deploy new services within their networks. Accessible Internet: Its 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. PSTN: Limited to licensed telecoms providers, and restricted by technical complexity, as well as through geographic boundaries of regulatory regimes. 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. PSTN: Connections are made based on bilateral agreements and standards that have been authorized by regulatory authorities. 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). PSTN: Regulation defines the requirements for cooperation, as well as the boundaries separating roles. 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. 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. PSTN: Stability of the network is core to the PSTNs 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.

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 its meaningless to calculate an average usage for any connected endpoint on the Internet. 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.

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. 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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bp-internetPSTN-201206-en