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Telecommunication Industry at a Glance |
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I. Telecommunications facts and history
The public telecommunications industry comprises a major part of the American
economy. The telecommunications and broadcasting industries together added $337
billion to the value of the American economy in 2006, or 2.6% of the national
Gross Domestic Product. The industry comprises a bewildering array of providers,
from classical “telephone companies” (known as “local exchange companies”)
through wireless companies and cable TV providers, and on to companies that sell
Internet-based applications and may not even have a physical presence in the
United States.
A. Circuit-switched technology
Before the 1990s, all telephone technology used a common architecture. The heart
of the system was the “switch,” an electronic device that, in the 1940s, began
replacing telephone operators sitting at “switchboards.” Each switch is located
in a one of the carriers’ “central offices” or “wire centers.”
When a customer wants to make a switched call, the switch provides a “dial
tone,” indicating that the switch is ready for a call. When the customer dials a
telephone number, the switch automatically establishes an electronic “calling
path” through the telephone network. The path allows electrical impulses to flow
between the customer’s microphone and the other user’s speaker, and vice-versa.
When the call is over, the switch breaks the connection and releases the network
resources used for the calling path. Using this method, each customer needs only
one pair of wires and can make calls to any other customer attached to the same
switch. By adding interoffice transport and “tandem” switching, customers can
speak to others anywhere on the worldwide switched network.
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