Integrated Services Digital Network (ISDN)

Jill Stewart

Integrated Services Digital Network (ISDN) is a digital dial-up service offered by telecommunications companies that transmits data, voice and video over a copper wire telephone line (PWWTC 1997: 96). ISDN offers high speed Internet access through a single telephone line, serving as an alternative to slower (low speed) analog modems.

Understanding advances such as ISDN in the telecommunications industry is important because as of 1998, many business organizations use videoconferencing and demand high speed Internet access for transacting business and gathering information (PWWTC 1997: 1). As a result, to achieve quick response rates between users sending data and graphics requires an increase in the bandwidth (information-carrying capacity) of the network (PWWTC 1997: 81). As a ‘high-quality, intermediate bandwidth digital service,’ ISDN is one option businesses should consider as a means of achieving this requirement (PWWTC 1997: 96).

TECHNOLOGY

HOW DOES AN ISDN MODEM WORK?

An ISDN modem is an internal or external device that ‘converts data from your computer into digital information that can be processed over the ISDN line,’ (C/Net Online 1998). ‘Studies have found that internal ISDN modems are 30 per cent faster than external ISDN modems, (C/Net Online 1998). (See Figures 1 and 2 for Macintosh and PC ISDN modems currently available in 1998 and their speed capabilities). External ISDN are more expensive, too (C/Net Online 1998). However, internal ISDN modems are more difficult to install and if problems should arise, it is easier to reset the system by turning an external modem on and off rather than having to ‘reboot’ the entire system, which is time consuming (C/Net Online 1998).

ISDN uses digital lines because they transmit data, video and voice, provide faster transmission speeds, and offer more reliability than analog lines (PWWTC 1997: 96). For example, as of 1997, the fastest transmission rates offered by most modems is 28.8 Kilobits per second (Kbps). ISDN offers higher transmission speeds ranging from 64 Kbps to 1.5 Megabits per second (Mbps) by changing analog telephone signals to digital (PWWTC 1997: 96).

Two types of channels are necessary for an ISDN connection. Two or more B-channels (Bearer channels) are used to carry information that is digitized and each channel operates at 64 Kpbs. Combining several B-channels achieves higher data speeds (PWWTC 1997: 96). Only one D-channel (data or delta channel) is needed, which sets up, controls and receives every telephone call. The D-channel also manages and improves telephone connections as well as reduces the amount of set-up time to gain access to the Internet (PWWTC 1997: 96). Essentially, the D-channel establishes communication and operates at 16 Kpbs or 64 Kpbs.

WHAT TYPES OF EQUIPMENT ARE REQUIRED?

To access the Internet via ISDN, the equipment needed includes a personal computer, (either a Macintosh or a PC), a Web browser and an ISDN internal or external modem, all of which are purchased separately by the consumer. It is recommended that before purchasing a ISDN modem, the user should check which ones will work best with the equipment of their Internet service provider (ISP) thereby establishing compatibility with the equipment of the ISP (C/Net Online 1998). In addition to contacting an ISP for Internet access service, it is also important to find out whether the ISP you are interested in offers ISDN access or else the user will not receive the access speeds offered by ISDN. Out of thirty national ISPs, only twelve offer ISDN access as of 1998 (C/Net Online 1998). ISDN service is also not available in many rural areas (C/Net Online 1998).

To order ISDN service, it is also necessary to contact your local telephone company, which is responsible for installing an additional telephone line if there are no extra lines that exist in your home. The telephone company installs an ISDN line, enabling a user the ability to dial and make the connection into their ISP computer network (C/Net Online 1998). ISDN lines offer users many different options, for example, it is important to specify if the ISDN line will be used primarily for data or for both data and voice (C/Net Online 1998). For example, if the user is only interested in having faster Internet access, some ISDN modems are not designed with a analog port to provide calling features. Thus, these types of modems do not allow users the ability to make phone calls over their ISDN line. Instead, ISDN is used for a variety of purposes and the equipment used to provide different features varies (C/Net Online 1998). Specifying what the user wants helps to ensure that the telephone carrier sets up their ISDN service correctly so that the service coordinates with the user’s requests and equipment (C/Net Online 1998). ‘Intel Blue’ is one package offered by many telephone carriers that offers a standard set of features compatible with most ISDN products (C/Net Online 1998).

BUSINESS

CURRENT STATUS OF ISDN IN THE U.S. MARKET

As of 1998, ISDN is widely available in the U.S. However, usage of ISDN is low and analysts believe this is due to the complicated implementation procedures for residences and pricing structures that confuse customers (PWWTC 1997: 125). Although prices vary between providers, generally the cost of an ISDN subscriber line ranges from $35 to $45 per month, in addition to the one-time installation fee, which ranges from $25 to $260 (PWWTC 1997: 125). Some local telephone ISDN providers, such as Pacific Bell are offering to waive the installation fee in exchange for a two-year service contract (C/Net Online 1998). Usage is also charged on a per-minute basis by the local telephone companies and special features such as Caller ID cost extra (C/Net Online 1998). Additionally, the price of ISDN modems range from $250 to $995 (C/Net Online 1998). The prices vary according to the speed capabilities and other ‘gee-whiz’ features provided by the modem. (See the following web site http://www.cnet.com/Content/Reviews/Compare/Isdn2/ss05.html for the 1998 pricing plans of specific state telephone carriers and the following web site http://www.cnet.com/Content/Reviews/Compare/Isdn2/ss05b.html for the 1998 costs charged by national Internet service providers with ISDN access in the U.S.)

IS ISDN WORTH PURCHASING?

In 1998, two companies have introduced new products intended to change the reputation of ISDN as a ‘problem-child technology,’ a term used to refer to the difficulties of installing ISDN (Bremser et al. 1998: 57). Motorola’s BitSurfr modem and Microsoft’s free ISDN add-on for Windows make it easier to install and use ISDN to access the Internet (Bremser et al. 1998: 57).

Other companies are going even further by offering other helpful options with the intentions of reducing customer frustration when purchasing ISDN service. For example, after consumers purchase the $329 ‘Farallon Netopia’ ISDN modem (for Macintosh and PC computers) offered by Farallon Computing, Inc. they have the opportunity to join its ‘Up & Running, Guaranteed Program.’ For an extra $99, this program does all the work for the customer including contacting your local phone company to order your ISDN line and coordinating ISDN service with an ISP, as well as providing toll-free technical assistance for one year (C/Net Online 1998).

TELCOS CANNOT IGNORE THE FINANCIAL INCENTIVES TO IMPROVE ISDN

In addition to the fact that it is inexpensive for telecommunication carriers to upgrade their existing infrastructures from analog to digital lines, there are other financial incentives for the telcos to provide low-cost, high speed Internet access (PWWTC 1997: 125). First of all, ‘providing Internet access is a $6.5 billion business that is expected to double, to $13.3 billion, in the next four years,’ (PWWTC 1997: 82). Secondly, telecommunication companies need to broaden their services as a way to hold onto their market share since their competitors, cable and satellite television companies (Direct Broadcast Satellite systems) are also offering Internet service to attract new customers (PWWTC 1997: 129). Consequently, all of the telecommunication companies have upgraded their networks in an effort to broaden their product line. Many of the telcos are also bundling their services to attract customers by offering Internet access, local, long-distance and wireless phone service at discount rates (PWWTC 1997: 105). Intense competition and bundling service offerings will drive prices down benefiting consumers (PWWTC 1997: 132).

ISDN HISTORY AND ITS USE FOR INTERNET ACCESS TO ATTRACT NEW CUSTOMERS

Prior to digital transmission systems, the network of a telecommunication carrier used a narrow bandwidth (information-carrying capacity) and slower transmission speed of analog technology (PWWTC 1997: 109). Analog technology was also susceptible to having noisy lines and could not easily handle long-distance connections (ISDN Tutorial Online 1998). In the 1960s, telephone networks were upgraded to digital switching systems (ISDN Tutorial Online 1998). Digital transmission methods were developed that increased the bandwidth over telephone copper wires, but were initially offered at high prices. Thus, major customers such as large corporations that required the increase in bandwidth capacity to transact business were the primary users of high speed digital technology because only businesses could afford it (PWWTC 1997: 110).

As of 1998, both consumers and businesses are in demand of more bandwidth for high speed Internet access (ISDN Tutorial Online 1998). Consequently, there are many competing Internet service providers (ISPs). Because Internet use by the public has increased, many companies now see the Internet as ‘both a threat and an opportunity,’ (PWWTC 1997: 131). In fact, besides telephone companies, cable and satellite television companies are investing billions of dollars into providing Internet access ‘to capitalize on opportunities and prevent possible lost revenue as interest in phone, video, paging, and other messaging applications over the Internet grows,’ (PWWTC 1997: 105).

What consumers may not realize is that both telephone and cable companies had the technology for high speed Internet access but were reluctant to offer it because ‘the cost of providing high speed service, as much as $2,000 per person, was just too high,’ (PWWTC 1997: 80). However, competition, stimulated by the Telecommunications Act of 1996, has prompted the two industries to offer Internet access service (PWWTC 1997: 80). Furthermore, despite increase competition, telecommunication carriers have two advantages over its competitors, ISDN was deployed in 1984 and has benefited from an early start in the marketplace (Bernier 1996: 1). Secondly, as of 1998, not all cable companies have upgraded their networks to provide high speed two-way transmission rates, so many cable modems have slower speed uploading capabilities (the speed from the user to the host) that run over a telephone line similar to the speed of ISDN (Reinhardt 1998: 80).

APPLICATION

ISDN is used primarily to send and receive data at high speeds ranging from 64 Kbps to 128 Kbps. ISDN offers higher transmission rates compared to modems that operate at 33.6 Kbps over an analog copper telephone line (PWWTC 1997: 110). Other consumers use even slower modems that provide Internet access at speeds of 14.4 Kbps to 28.8 Kbp over a telephone line (Bernier 1996: 1). Low cost is a major factor contributing to the continued use of slower modems by consumers. ISDN is also beneficial to a user who needs to send or receive data and make a phone call simultaneously. For example, ISDN allows a user to download files while receiving a fax or making a phone call (C/Net Online 1998). In fact, a maximum of eight separate devices can be connected to one ISDN line (C/Net Online 1998). ISDN also allows users to have 64 different telephone numbers thereby making it possible for each device to have a unique phone number (C/Net Online 1998). Prior to ISDN, a separate telephone line was required for each device in order to use two devices simultaneously (ISDN Tutorial Online 1998). Thus, a user had one telephone line for a computer, one line for a fax machine and so forth (ISDN Tutorial Online 1998).

Like traditional modems, ISDN offers consumers and business people access to electronic mail, online shopping, bulletin-boards, remote network access, information services, such as online newspapers, online chat rooms and business services, such as online banking (PWWTC 1997: 439). However, ISDN is offered in two different ways to accommodate light and heavy users of computer applications. Basic Rate Interface (BRI) is targeted toward small offices or single users. BRI provides a maximum throughput of 144 Kbps by using two B-channels (with a speed capability of 64 Kpbs each) to carry voice or data and one D-channel (at 16 Kpbs) to signal and setup call connections (ISDN Tutorial Online 1998). Primary Rate Interface (PRI) is designed for ISPs and large corporations because it can handle ‘more traffic’ efficiently that occurs from many users of a large business or organization (PWWTC 1997: 96). PRI provides a maximum throughput of 1536 Kbps by using twenty-three B-channels (with a speed capability of 64 Kpbs each) to carry voice or data and one D-channel (at 64 Kpbs) to signal and setup call connections (ISDN Tutorial Online 1998).

In addition to Internet access, ISDN also provides high quality voice transmission, conference calling, call forwarding, voice mail, remote access to office networks, fax and image transmissions and videoconferencing (PWWTC 1997: 125). In fact, some people, such as Sheldon Theodore, a Pacific Bell Consultant in Sales Operations believe the killer application (market breakthrough) for ISDN is the success of videoconferencing used by businesses. After all, as of 1997, ‘95 per cent of videoconferencing for business is (achieved) over ISDN, (Pender 1997:1).

However, one of the disadvantages of ISDN is that it does not offer the same quality or speeds consumers and business people are demanding to deliver the audio, video, graphics and other complex content that more and more web pages contain in 1998 (Davis 1998). The high cost of ISDN is also having an impact on the use of ISDN. Consumers and business people are reportedly in demand of low cost Internet service providers (ISPs) (PWWTC 1997: 35). As of 1997, cable is offering the highest access speeds at the lowest prices (PWWTC 1997: 83).

DRIVING FORCES

INTERNET POPULARITY SPARKS ‘AGGRESSIVE’ DEPLOYMENT OF ISDN

Unlike the telephone companies in Europe, Australia, New Zealand, and Singapore, ISDN was deployed much more slowly by U.S. telecommunication carriers (PWWTC 1997: 96). However, the popularity of the Internet in the U.S. in the 1990s has caused many telcos to provide ISDN ‘more aggressively’ (PWWTC 1997:96). In fact, over a six month period of 4,200 people surveyed, once in August 1995 and again in March 1996, there was a 50 per cent increase in the number of people who had gained access to the Internet (PWWTC 1997: 438). The 4,200 people surveyed were sixteen years of age and older and resided in either the U.S. or Canada (PWWTC 1997: 438).

Furthermore, as of 1997, every month the number of subscribers to an ISP increased by 15 per cent or more. Additionally, there are an estimated 50 million Internet users worldwide (PWWTC 1997: 1). In the U.S. there are an estimated 23 million Internet users (CNET Online 1998).

Economic factors such as these are shaping the continued production of ISDN. Like satellite and cable companies, telephone companies are hoping to profit from the growing popularity of the Internet in the 1990s.

Social factors are also shaping the use of ISDN. ‘The rise of the Internet as a business tool’ is evident considering many business people use the Internet daily to gather information and conduct business transactions (PWWTC 1997: 360). A similar trend in Internet use is occurring among consumers as well. In fact, as of 1997, personal computers (PCs) can be found in 40 per cent of households in the U.S. (PWWTC 1997: 27).

For many years, the primary business of telephone companies consisted of providing voice service over copper wires. But as of 1994, providing new services such as Internet access have developed rapidly in response to the growing demand by consumers and businesses (PWWTC 1997: 123). High speed digital services are in demand because more businesses require videoconferencing and multimedia capabilities (PWWTC 1997: 124).

POLICY

STANDARD MARKET OFFERS INTERNATIONAL INTEROPERABILITY OF ISDN

ISDN is an international telecommunications standard for the transmission of data, voice and video over a copper wire telephone line (PWWTC 1997: 96). ISDN offers users a continuous digital path to transmit a call (PWWTC 1997: 125). For example, although Euro-ISDN does not offer as many service options, users are still able to complete ISDN voice calls or data transmissions between the U.S and Europe (PWWTC 1997: 126). Thus, market standards are facilitating the diffusion of ISDN worldwide.

DEREGULATION FACILITATED TELCOS DECISION TO BECOME AN ISP

Deregulation has caused significant change and new opportunities in the telecommunications industry (PWWTC 1997: 105). The approval of the Telecommunications Act of 1996 permits new entrants to enter previously restricted markets, such as the telephone market. New competition is effecting the availability and pricing of telecommunications services (PWWTC 1997: 105). Consequently, deregulation has caused the telecommunications industry to expand their services or risk losing market share and revenue to new entrants in its market (PWWTC 1997: 106).

OPPORTUNITIES, PROBLEMS AND PROSPECTS

OPPORTUNITIES: CONTINUED GROWTH OF INTERNET USAGE IS EXPECTED

Many analysts predict Internet usage by consumers and businesses will continue to grow in the U.S. After all, every year between 1985 and 1996, the number of Internet users doubled (PWWTC 1997: 108). Furthermore, in the U.S., 40 per cent of children are choosing to surf the Internet as an alternative to watching television (PWWTC 1997: 1). Similarly, young adults between 18 and 35 years of age who watch four hours of television every night are spending one of those hours on the Internet (PWWTC 1997: 1). Internet-based telephony and videoconferencing are also expected to grow in popularity among consumers and businesses (PWWTC 1997: 108).

PROBLEMS: TELCOS FACE INTENSE COMPETITION

Despite their financial resources to conduct research to improve ISDN and provide other high speed modems such as Digital Subscriber Line (DSL), the $110-billion-a-year telecommunications industry will face intense competition from the satellite television and cable industries (Kupfer 1998: 70). For instance, more and more cable companies are upgrading their networks to provide high speed two-way traffic transmission thereby eliminating its disadvantage of slow uploading speeds (PWWTC 1997: 83). Similarly, analysts predict satellite speeds will increase as well. ‘Downloads of 10 million bits per second are possible in the next several years’ (PWWTC 1997: 83).

PROSPECTS: MAKING ISDN FASTER

Broadband ISDN (BISDN) will be a digital service that provides Internet access speeds of 155 Mbps and higher (PWWTC 1997: 126). Although implementing BISDN will require extensive changes to the network infrastructures of telephone carriers, analysts predict BISDN will be available by the year 2000 (PWWTC 1997: 126).

FIGURE 1: ISDN THROUGHPUT OF MACINTOSH ISDN MODEMS

 Source: (http://www.cnet.com/Content/Reviews/Compare/Isdn2/ss03a.html) (April 1998)

FIGURE 2: ISDN THROUGHPUT OF PC ISDN MODEMS

Source: (http://www.cnet.com/Content/Reviews/Compare/Isdn2/ss03.html) (April 1998)

REFERENCES

Bernier, P. (1996) ‘Is high-speed Internet access up to speed?’ Interactive Week, 15 January.

Bremser et al. (1998) ‘The best and worst of the Net 1997’, Internet World, January.

Davis, A. (1998) ‘Cable modems: a high-bandwidth solution to Internet access’, Desktop Video Communications, January-February.

Hernandez, N. and Theodore, S. (1998) ‘Trends in telecommunication technology’, 31 March. Presentation, Pacific Bell Executive Communications Center, 1010 Wilshire Blvd, Suite 100, Los Angeles, California, 90007.

Komando, K. (1998) ‘When cable modems and DSL compete, consumers will win’, Los Angeles Times, 16 February.

Kupfer, A. (1998) ‘How hot is cable, really?’ Fortune, 16 February.

Online. Available: http://www.cnet.com/Content/Reviews/Compare/Isdn2/ (April 1998) (C/NET: The Computer Network Web site for ISDN).

Online. Available: http://www.ziplink.net/~ralphb/ISDN/defs.html. (April 1998) (ISDN Tutorial Web site).

Pender, L. (1997) ‘Intel.PictureTel debates future of videoconferencing’, Computer Reseller News, 15 December.

The Price Waterhouse World Technology Centre (PWWTC) (1997) Technology Forecast: 1997, California: Price Waterhouse World Firm Services BV, Inc.

Reinhardt, A. (1998) ‘Warp speed ahead’, Business Week, 16 February.

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