Telecommunications and Networks I. Chapter overview foundation Concepts: Foundations of Information in Business

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Traffic management – manage network resources and traffic to avoid congestion and optimise telecommunications service levels to users.

  • Security – provide authentication, encryption, and auditing functions, and enforce security policies.

  • Network monitoring – troubleshoot and watch over the network, informing network administrators of potential problems before they occur.

  • Capacity planning – survey network resources and traffic patterns and users’ needs to determine how best to accommodate the needs of the network as it grows and changes.

    NETWORK TOPOLOGIES - [Figure 4.22]
    There are several basic types of network topologies, or structures, in telecommunications networks. Three basic topologies used in wide area and local area telecommunications networks are the:

    1. Star network

    2. Ring network

    3. Bus network

    Star Network

    The star network, a popular network configuration, involves a central unit that has a number of terminals tied into it.

    1. Ties end user computers to a central computer.

    2. The central unit in the star network acts as the traffic controller among all the other computers tied to it. The central computer is usually a mainframe (host), which acts as the file server.

    3. A star network is well suited to companies with one large data processing facility shared by a number of smaller departments. Many star networks take the form of hierarchical networks with a centralized approach.

    Advantages of the star network:

    1. Several users can use the central unit at the same time.

    Disadvantages of the star network:

    1. The whole network is affected if the main unit “goes down,” and all communications stop.

    2. Considered less reliable than a ring network, since the other computers in the star are heavily dependent on the central host computer. If it fails, there is no backup processing and communications capability and the local computers will be cut off from the corporate headquarters and from each other. Fault Tolerance becomes very important.

    3. Cost of cabling the central system and the points of the star together are very high.

    Ring Network

    A ring network is much like a bus network, except the length of wire, cable, or optical fiber connects to form a loop.

    1. Local computer processors are tied together sequentially in a ring with each device being connected to two other devices.

    2. A ring network has a decentralized approach.

    3. A ring network is often used to link mainframes over wide distances.

    4. Considered more reliable and less costly than star networks because if one computer fails, the other computers in the ring can continue to process their own work and communicate with each other.


    1. Ring networks do not require a central computer to control activity nor does it need a file server.

    2. Each computer connected to the network can communicate directly with the other computers in the network by using the common communications channels, and each computer does its own independent applications processing.

    3. When one computer needs data from another computer, the data is passed along the ring. The ring network is not as susceptible to breakdowns as the star network, because when one computer in the ring fails, it does not necessarily affect the processing or communications capabilities of the other computers in the ring.

    Bus Network

    In a bus network, a single length of wire, cable, or optical fiber connects a number of computers.

    1. All communications travel along this cable, which is called a bus.

    2. Bus networks have a decentralized approach.


    1. There is no host computer or file server.

    2. Often used to hook up a small group of microcomputers that share data.

    3. Not as expensive as the star network, and if one of the microcomputers fails, it will not affect the entire network.

    Until recently, there was a lack of sufficient standards for the interfaces between the hardware, software, and communications channels of data communications networks. For this reason there is often a lack of compatibility between the data communications hardware and software of different manufacturers. This situation has:

    1. Hampered the use of data communications

    2. Increased data communications costs

    3. Reduced data communications efficiency and effectiveness.

    Industry Response: Computer manufacturers and national and international organizations have developed standards called protocols and master plans called network architectures to support the development of advanced data communications networks.


    A protocol is the formal set of rules for communicating, including rules for timing of message exchanges, the type of electrical connection used by the communications devices, error detection techniques, means of gaining access to communications channels, and so on. The goal of communications network architectures is to create more standardization and compatibility among communications protocols.

    Network architectures:

    The goal of network architectures is to promote an open, simple, flexible, and efficient telecommunications environment. This is accomplished by the use of:

    1. Standard protocols

    2. Standard communications hardware and software interfaces

    3. Standard multilevel interface between end users and computer systems.

    The OSI Model: [Figure 4.23]

    The International Standards Organization (ISO) is working on the establishment of a standard protocol for data transmission. They have developed a seven-layer Open Systems Interconnection (OSI) model to serve as a standard model for network architectures. Dividing data communications functions into seven distinct layers promotes the development of modular network architectures, which assists the development, operation, and maintenance of complex telecommunications networks.

    Seven layers of OSI include:

    1. Application layer

    2. Presentation layer

    3. Session layer

    4. Transport layer

    5. Network layer

    6. Data link layer

    7. Physical layer

    The Internet’s TCP/IP- [Figure 4.23]

    The Internet use a system of telecommunications protocols that has become so widely used that it is equivalent to network architecture. The Internet’s protocol suite is called Transmission Control Protocol/Internet Protocol and is known as TCP/IP. TCP/IP consists of five levels of protocols that can be related to the seven layers of the OSI architecture. TCP/IP is used by the Internet and by all Intranets and extranets. Many companies and other organizations are also converting their client/server networks to TCP/IP.

    Five levels of TCP/IP include:

    1. Application or process layer

    2. Host-to-host transport layer

    3. Internet protocol (IP)

    4. Network interface

    5. Physical layer

    The form or method of communications affects the maximum rate at which data can be moved through the channel and the level of noise that will exist.
    Transmission Speed:

    • Bandwidth - Communications speed and capacity of telecommunications networks can be classified by bandwidth. This is the frequency range of a telecommunications channel; it determines the channel’s maximum transmission rate.

    • Baud Rate - The number of times per second that a data communications signal changes; with each change, one or more bits can be transmitted - bits per second (BPS).

    • Voiceband - Are low-speed analog channels, which are normally used for voice communications, but can also be used for data communications by microcomputers, video terminals, and fax machines.

    • Medium-Band - Are specially conditioned leased lines that can handle faster transmission.

    • Broadband - Are high-speed digital channels, which allow transmission rates at specific intervals. They typically use microwave, fiber optics, or satellite transmission.

    To transmit data in a network, there are various switching alternatives:

    • Circuit Switching - a link is established between the sender and the receiver, which remains in effect until the communications session is completed (e.g., telephone).

    • Message Switching - a message is transmitted a block at a time from one switching device to another.

    • Packet Switching - involves subdividing communications messages into fixed or variable groups called packets. Typically, packets are 128 characters long, while they are of variable length in the frame relay technology. Value-added carriers who use computers and other communications processors to control the packet switching process and transmit the packets of various users over their networks frequently operate packet switching networks.

    • Cell Switching - ATM (Asynchronous Transfer Mode) switch, which breaks voice, video, and other data into, fixed cells, and routes them to their next destination in the network.


    Bandwidth Alternatives:

    The communications speed and capacity of telecommunications networks can be classified by bandwidth. This is the frequency range of a telecommunications channel; it determines the channel’s maximum transmission rate (voiceband, medium-band, and broadband).

    Business Applications of the Internet:

    Companies are using the Internet for business in a variety of ways, including enterprise communications and collaboration, electronic commerce, and strategic business alliances.

    Business Value of the Internet:

    Strategic capabilities which enable businesses to disseminate information globally, communicate interactively with customized information and services for individual customers, and foster collaboration of people and integration of business processes within the enterprise and with business partners.

    Business Value of Telecommunications:

    Information technology, especially in telecommunications-based business applications, help a company overcome geographic, time, cost, and structural barriers to business success.

    Cellular Phone System:

    A radio communications technology that divides a metropolitan area into a honeycomb of cells to greatly increase the number of frequencies and thus the users that can take advantage of mobile phone service.

    Client/Server Networks:

    A computing environment where end user workstations (clients) are connected to micro or mini LAN (servers) or possibly to a mainframe (superserver).

    Coaxial Cable:

    A sturdy copper or aluminium wire wrapped with spacers to insulate and protect it. Groups of coaxial cables may be bundled together in a bigger cable for ease of installation.

    Communications Satellites:

    Earth satellites placed in stationary orbits above the equator that serve as relay stations for communications signals transmitted from earth stations.


    Moving to smaller computing platforms, such as from mainframe systems to networks of personal computers and servers.


    A network that links selected resources of the intranet of a company with its customers, suppliers, and other business partners, using the Internet or private networks to link the organizations’ intranets.


    The technology that uses cables consisting of very thin filaments of glass fibers that can conduct the light generated by laser at frequencies that approach the speed of light.

    Internet Revolution:

    The explosive growth of the Internet is the revolutionary technology phenomenon of the 1990s. The Internet has become the largest and most important network of networks today, and is evolving into the information superhighway of tomorrow.

    Internet Technologies:

    The Internet and its technologies are being used to build interconnected enterprises and global networks, like intranets and extranets that form information superhighways to support enterprise collaboration, electronic commerce, and internal business applications.

    Internetwork Processors:

    Internetwork processors such as bridges, routers, hubs, or gateways to other LANs or wide area networks interconnect many LANs.


    Open, secure Internet-like networks within organisations.

    Legacy Systems:

    The older, traditional mainframe-based business information systems of an organization.

    Local Area Network (LAN):

    A communications network that typically connects computers, terminals, and other computerized devices within a limited physical area such as an office, building, manufacturing plant, or other work site.

    Modem (MOdulation - DEModulation):

    A device that converts the digital signals from input/output devices into appropriate frequencies at a transmission terminal and converts them back into digital signals at a receiving terminal.


    An electronic device that allows a single communications channel to carry simultaneous data transmissions from many terminals.

    Network Architectures - OSI:

    The International Standards Organization (ISO) has developed a seven-layer Open Systems Interconnection (OSI) to serve as a standard model for network architectures in order to promote an open, simple, flexible, and efficient telecommunications environment.

    Network Architectures - TCP/IP: The Internet’s protocol suite is called Transmission Control Protocol/Internet Protocol (TCP/IP). TCP/IP consists of five levels of protocols that can be related to the seven layers of the OSI architecture. TCP/IP is used by the Internet and all intranets and extranets.
    Network Computing:

    A network-centric view of computing in which “the network is the computer,” that is, the view that computer networks are the central computing resource of any computing environment.

    Network Management:

    Network management packages such as network operating systems and telecommunications monitors determine transmission priorities, route (switch) messages, poll terminals in the network, and form waiting lines (queues) of transmission requests. They also determine and correct transmission errors, log statistics of network activity, and protect network resources from unauthorized access.

    Network Operating System:

    A network operating system is a program that is used to control telecommunications and the use of and sharing of network resources.

    Network Server:

    LANs use a powerful microcomputer with a large disk capacity as a file server or network server. The server handles resource sharing and telecommunications.

    Network Topologies:

    Two basic types of network topologies, or structures, in telecommunications networks include point-to-point lines and multidrop lines. In point-to-point lines, each terminal is connected by its own line to a computer system. In multidrop lines, several terminals share each data communications line to a computer.

    Open Systems:

    Model of network protocols enabling any computer connected to a network to communicate with any other computer on the same network or a different network, regardless of the manufacturer.

    Peer-to-Peer Networks (P2):

    Computing environments where end user computers connect, communicate, and collaborate directly with each other via the Internet or other telecommunications network links.


    A set of rules and procedures for the control of communications in a communications network.

    Switching Alternatives:

    In telecommunications transmission, a variety of switching alternatives exists. These include: circuit switching, message switching, packet switching, and cell switching.

    Telecommunications Channels:

    Telecommunications channels are the part of a telecommunications network that connects the message source with the message receiver. It includes the physical equipment used to connect one location to another for the purpose of transmitting and receiving information.

    Telecommunications Media:

    Telecommunications media are the physical media used by telecommunications channels. They include, twisted-pair wire, coaxial cables, fiber optic cables, terrestrial microwave, communications satellite, cellular, and infrared systems.

    Telecommunications Network Components:

    Telecommunications components include terminals, telecommunications processors, telecommunications channels and media, computers, and telecommunications control software.

    Telecommunications Processors:

    Multiplexers, concentrators, communications controllers, and cluster controllers that allow a communications channel to carry simultaneous data transmissions from many terminals. They may also perform error monitoring, diagnostics and correction, modulation-demodulation, data compression, data coding and decoding, message switching, port contention, and buffer storage.

    Telecommunications Software:

    Telecommunications software, including network operating systems, telecommunications monitors, web browsers, and middleware, control and support the communications activity in a telecommunications network.

    Trends in Telecommunications:

    Toward a greater number of competitive vendors, carriers, and services; toward integrated, digital, global networks for voice, data, and video, with heavy use of fiber optic lines and satellite channels; toward the pervasive use of telecommunications networks in support of business operations, managerial decision making, and strategic advantage in global markets.

    Virtual Private Network:

    A secure network that uses the Internet as its main backbone network to connect the intranets of a company’s different locations or to establish extranet links between a company and its customers, suppliers, or other business partners.

    Wide Area Network (WAN):

    A data communications network covering a large geographic area.

    Wireless LAN:

    Using radio or infrared transmissions to link devices in a local area network.

    Wireless Technologies:

    Using radio wave, microwave, infrared, and laser technologies to transport digital communications without wires between communications devices.

    1. REVIEW QUIZ - Match one of the key terms and concepts

    [See Review Quiz Answers found at the end of the text]

    1. The Internet is a driving force behind developments in telecommunications, networks, and other information technologies. Do you agree or disagree? Why?
    By all industry accounts, this statement is very accurate. In order to remain competitive in domestic and global markets, businesses will become even more reliant on technology as we enter the 21century. Businesses are pushing for developments in technology, which will enable them to gather and disseminate information at greater speeds. Technology is crucial for accurate decision-making, and this demand will definitely drive developments in these technologies.

    2. How is the trend toward open systems, connectivity, and interoperability related to business use of the Internet, intranets, and extranets?

    As more businesses become dependent on the use of the Internet, intranets, and extranets in computing and telecommunications, the industry will strive to move closer towards achieving open systems which use common standards for hardware, software, applications, and networking. This computing environment will enable businesses to easily establish connectivity within their own organizations, as well as enable them to communicate with others outside the organization. Open systems will enable the many different applications of end users to be accomplished using the different varieties of computer systems, software packages, and databases provided by a variety of interconnected networks.
    3. Refer to the Real World Case on the Sierra Wireless AirCard in the chapter. Which applications do you think have the most promise to bring success to wireless e-commerce? Why?
    Students’ answers will vary according to their imaginations. e-commerce is in its growth stage, and devices such as the Sierra Wireless AirCard will definitely come into greater play. Technology is in a continual flux of innovation, and companies are striving to offer and conduct business with their customers in real-time and online. These efficiencies and information provided through technological innovation and Web-bases services are extremely beneficial to both parties as the information is captured at the moment.

    1. How will wireless information appliances and services affect the business use of the Internet and the Web? Explain.

    The growing trend in technology is in the area of wireless information appliances and services which individuals are able to use from anywhere and at any time. This trend will continue to grow as technology improvements are made to appliances, which use wireless technology. For example, we now have wireless keyboards and wireless mice. We have experiences a tremendous increase in the use of cellular and PCS telephone and pager systems. This technology is used to support mobile phone service, mobile voice and data communications. Wireless technology is also being used to connect local area networks through the use of radio and infrared transmissions. As more people experience the mobility that wireless appliances offer, and as they work situations require access to information and data form anywhere, wireless technology will definitely affect the business use of the Internet and the Web.

    5. What are the business benefits and management challenges of client/server networks? Network computing? Peer-to-peer networks?
    Benefits of client/server computing include:

    1. Clients (end users) can perform some or most of the processing of their business applications.

    2. LAN servers can share application processing, manage work group collaboration, and control common hardware, software, and databases.

    3. Data can be completely processed locally, where most input and output must be handled.

    4. Provides access to the workstations and servers in other networks.

    5. Computer processing is more tailored to the needs of the end users.

    6. Increases information processing efficiency and effectiveness, as users are more responsible for their own application systems.

    7. Allows large central-site computers to handle the jobs they do best - such as high-volume transaction processing, communications network security and control, and maintenance and control of large corporate databases.

    8. Clients at local sites can access the corporate superservers to receive corporate wide management information or transmit summary transaction data reflecting local site activities.

    Management Challenges:

    As computing power becomes distributed and interconnected throughout organizations by networked computer systems taking the form of client/server networks, management issues will increase. Problems such as the protection, access, and control of corporate data from within and outside the organization will increase dramatically.

    Benefits of network computing include:

    1. Many of the benefits listed above for client/server computing can also be included in this answer.

    2. Communications, distance education, distributed computing, e-commerce, email, information processing, telecommuting are a few of the benefits that can be listed.

    Management Challenges:
    Security and privacy issues are a major challenge.
    Benefits of peer-to-peer computing include:

    1. Peer-to-peer is a network architecture that gives equal power to all computers on the network; used primarily in small networks.

    2. P2P is a form of distributed processing, where individual computers can share data, disk space, and even processing power for a variety of tasks when computers can share data, disk space, and even processing power for a variety of tasks when they are lined in a network, including the Internet.

    3. P2P computing puts processing power back on users’ desktops, linking these computers so that they can share files or processing tasks.

    4. P2P involves two distinct types of technology: the sharing of digital files and data between two separate computers, and the sharing of different CPU cycles.

    5. The P2P model stands in contrast to the network computing model because processing power resides only individual desktops, and these computers work together without a server or any central controlling authority.

    6. It has been estimated that most companies and individuals – use less than 25 percent of their processing and storage capacity. P3P computing tabs the unused disk space or processing power on PC or workstation networks for large computing tasks that can now only be performed by large expensive server computers or even supercomputers.

    Management Challenges:

    The lack of a central authority is what landed Napster in court. This could also pose a major threat for any company were there is major concern for copyright infringements.

    6. What is the business value driving so many companies to rapidly install and extend intranets throughout their organizations?
    The business value driving so many companies to rapidly install and extend intranets and enterprise information portals throughout their organizations is the ability to communicate, collaboration, and coordinate with others. Business value includes cost reductions, increased revenues, creating closer connections with their customers and suppliers. ROI on investment in this technology is quickly realized. Access to accurate, instant, and readily available data is crucial for all businesses today. e-commerce applications have enabled companies to derive business value by generating new revenue sources, reduce costs of doing business, develop new web-based products, increase customer loyalty and retention, attract new customers, and develop new markets and channels.
    7. What strategic competitive benefits do you see in a company’s use of extranets?
    Students’ answers will vary. Strategic competitive benefits of a company’s use of extranets can include: lower costs, enhance interactive marketing with customers, suppliers and distributors, enable better and more innovative development of products and services, build strategic alliances with suppliers, and leverage partnerships. Companies may use extranets to differentiate themselves from their competitors through innovative use of this type of technology, thus would be able to establish a competitive advantage.

    1. Refer to the Real World Case on Alberta's SuperNet in the chapter. Should other Canadian provinces do the same? Why or why not?

    Students’ answers will vary based on how they weigh the pros and cons of the case. On the plus side, Alberta’s SuperNet provides increased productivity and access for telecommuting, as well as greater potential for business networking. However, on the minus side, broadband still presents problems of affordability, standardization, and reliability. Students will have to weigh the growing pains against the potential for growth.

    9. Do you think that business use of the Internet, intranets, and extranets has changed what businesspeople expect from information technology in their jobs? Explain.
    Technology continues to grow at a rapid pace, and the business use of technology such as the Internet, intranets, and extranets has also continued to grow. Certainly business people expect more from information technology in order to do their jobs. For example, businesses have become extremely dependent on these technologies in order to conduct business in the global environment and fast-changing global market. Business people expect to be able to access all kinds of information that enables them to complete their job requirements faster and with more accuracy than what was ever possible before. They want to be able to communicate, collaborate, and coordinate with others like never before.
    10. The insatiable demand for everything wireless, video, and Web-enabled everywhere will be the driving force behind developments in telecommunications, networking, and computing technologies for the foreseeable future. Do you agree or disagree? Why?
    There is no doubt that the insatiable demand for everything wireless is a growth area. Bluetooth technology is a prime example of how and where companies are expanding in the development for wireless appliances. Competition is fierce, and companies are using any type of technology in order to tap markets, and stay abreast with the demands of their customers, suppliers, channel members, and even their competitors. Demand for wireless is expected to grow at a rapid pace in order to accommodate the demands of the “man on the move” concept. Wireless access to the Internet, intranets, and extranets is growing as more Web-enabled information appliances proliferate.
    Smart telephones, pagers, PDSs, and other portable communications devices have become very thin clients in wireless networks. Agreement on a standard wireless application protocol (WAP) has encouraged the development of many wireless Web applications and services. Telecommunications industry continues to work on third generation (3G) wireless technologies whose goal is to raise wireless transmission speeds to enable streaming video and multimedia applications on mobile devices. WAP standard specifies how Web pages in HTML or XML are translated into a wireless markup language (WML) by filter software and pre-processed by proxy software to prepare the Web pages for wireless transmission from a Web server to a Web-enabled wireless device.


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    Telecommunications and Networks I. Chapter overview foundation Concepts: Foundations of Information in Business

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