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The PSTN (the public switched telephone networks) we have been describing has a star configuration. Local loops (usually one per subscriber) terminate in a CO (central-office). This CO completes connections from one local loop to another local loop or from one local loop to a trunk that terminates on some other CO. This CO has gone through a number of fundamental technological changes. The manual system required, of course, constant attention from operators. In the late 1800s, telephone calls were connected manually at the CO. When a call came in, an attendant would plug into a horizontal bar line. He then would yell to the operator who handled the customer being called, and that second operator would connect to the bar and finish setting up the call. When the call was completed, another operator would yell to all in the room that the line was clear again. The step – by – step system, which is still in operation in many parts of country, utilized that is known as the Stronger switch. The intelligence in the system was located in relays mounted on each switch. The switch itself responded to the dial pulses of the rotary dial.

The crossbar system was still electromechanical in nature, but the intelligence of the system was separated from the actual switch. Thus, this common control could be used repeatedly to set up and tear down calls and never sit idle.

When electronics came along, the electromechanical control of the common control system was replaced with electronics, and the network, or matrix, was usually replaced with tiny glass – encapsulated reed switches. Hence, only a part of the switch was electronic. In the next generation, the stored program operation of a digital computer was applied to the switch, the talking path was no longer an electrically continuous circuit; rather the speech being carried was digitized into a stream of “1s” and “0s.” Notice that this final generation depicted a significant change from the previous generations in that there was no longer an electrical talking path through the switch. We were, in fact, operating in a digital (rather than analog) domain.

However, whether the system was analog or digital, one thing must be recognized: there was an actual talking path – a circuit – from the calling party to the calling party. This talking path was established at the beginning of a call. We call it circuit switching. This system is not actually efficient. When I am talking, you are listening, and the circuit is being used in only one direction – that is 50 percent. When you are talking and I am listening, it is still 50 percent. When neither of us is talking, or when there is silence between words, the efficiency is 0 percent.
There is, however, a different kind of connection, and we see it today in a number of applications:
- credit-card verification;
- automated teller machine;
- SS7;
- Internet and the World Wide Web.
This system is called packet switching(as opposed to circuit switching). In a packet-switching system, the information being transmitted (be it data or digitized voice) is not sent in real time over a dedicated circuit; rather it is stored in a nearby computer seizes a channel heading in the general direction of the destination, and that packet of data is transmitted at very high speeds. Then the channel is released. So, except for some necessary supervisory information (destination, error checking codes, etc.) the channel is 100 percent efficient. When the distant station gets that message no more than a few milliseconds later, it responds with the necessary handshaking information - again, by accumulating a packet of data, seizing a channel, and bursting the information out over that channel. Again, 100 percent efficient.
As mentioned earlier, the packet networks in the world (actually overlay networks to the PSTN) are being used extensively for data: only recently are we seeing them being used for voice. As systems are perfected, this also will change.