Every home with classical telephony service (POTS) is served with a pair of copper wires called the local loop. It's a loop since they form each side of an electrical service with the generator (switching system port) in the telco central office and the load in the residence (telephone or modem), which completes the circuit. You might hear this 2-wire loop called a twisted pair or tip-and-ring, which refer to electrical matters outside the scope of this article. You can also ignore the 3rd and 4th wires you see if you cut open that cable in your home since they are unrelated to the telco service. Also not relevant is that nowadays the copper loop terminates in a multiplexor or DSLAM since this equipment keeps the electrical "view" identical at your home.
This circuit support AC and DC. When the phone is inactive (on-hook), the circuit blocks DC. Power ringing (that will still operate an electro-mechanical ringer) is AC so that it can operate the phone's bell (or electronic ringer). That is one example of signalling that the telco provides you. Another example of AC signalling from the central office is the 1200 bps data burst that provides Caller Id.
When you go off-hook to answer the phone or to dial out you have both AC and DC circuits. Except now the AC signalling is kept to voice-band levels and frequencies. Examples include DTMF digits, conversation (voice or dial-up data), Call Waiting tone, and so on. Some features are initiated by the user with a flash signal, which is a momentary interruption in the DC path, but not so long that it looks like you've hung up.
That's pretty much all. Now, try to imagine all the nifty features and services you can build with that range of signalling options. Not easy, is it? There isn't much to work with here since you are dealing with signalling technology that dates from around World War II.
Originally this paucity of signalling was necessary due to the primitive technology (from our modern perspective) which was designed for good economics, reliability and to make it possible to simply dial and talk. Caller Id was added over 20 years ago and had to be carefully engineered to work reliably while not affected users without Caller Id. DTMF (or touch tone) came many years before that.
The necessity for this simple signalling due to technology considerations hasn't been true for very many years. Attempts to modernize the local loop and its feature capabilities started back in the 1970s. The history of these (mostly) failures isn't pretty, especially for me since I participated in it for over 10 years during the 80s and 90s. Perhaps the biggest boondoggle of that time was ISDN, so let's look at it briefly since it exposes the theme I am developing in this series of articles: how the telephone company seeks to keep to itself technology that enables revenue-generating services.
ISDN was a digital service that, for homes and small offices, supported two 64-kpbs channels for voice or data, and a 16-kbps channel for packet data and fairly sophisticated call signalling. The signalling system was extensible and comprehensive, with the ability to support some very interesting and innovative services, especially when combined with those two voice-data channels. While the protocol was not based on IP it certainly could have supported it (remember, this was long before the internet entered the wider world).
So what happened to ISDN? One big problem was business inertia. Monopolies has little incentive to innovate and embark on major capital-intensive projects regardless of the purported benefits; it was far easier to sit back and let the guaranteed profits flow in for the existing services. The other big problem, which is of interest to us, now, is that ISDN made it possible for service innovation by outsiders, even users themselves. Here we had a major threat to the core of the telco business model. While the downward-spiralling path had many bizarre convolutions, this is what ultimately doomed ISDN.
With no business leadership the technology teams were hopelessly adrift. So the fight drifted into the realm of the equipment vendors who filled this vacuum with unproductive squabbling in a battle for competitive positioning. There were even several attempts to dumb down ISDN to effectively turn the signalling into a digital analogue of tip-and-ring by (so-called stimulus signalling). It was ugly, pointless and fruitless.
The issue didn't die until the internet and early forms of DSL exploded onto the scene in the 90s. The world had gone IP mad. Primitive versions of internet voice (VoIP) then appeared and began to enable what ISDN had promised decades earlier. Unloved and unnoticed, ISDN crawled into a corner and died. No one noticed.
With VoIP on the scene and with no more investment in legacy switching infrastructure, the battleground for services has moved on to mobile, VoIP and the core of the network. You should not expect any new services on the legacy telephone network.
Before ending, I must mention that enterprise telephony has been far more innovative than residential. The reason is that, as with residential, once the demarcation point moved outside the building there was a booming industry in private branch exchanges (PBX). Also, the trunk varieties used to interconnect medium and large enterprises to the network had more signalling services than on residential 2-wire loops. A lot of innovative services came to the business world because of this. Local company Mitel built its fortunes in this market a generation ago. However, since VoIP and the internet are similarly rolling over this market sector I will not delve further into the history of PBX technology.
In my next article I'll talk about Intelligent Networking (IN), which is the network-side complement to ISDN. This technology was nearly as stillborn but further shows how telcos strove to, unsuccessfully, fence in service intelligence, and its revenue. Later I'll talk about each of the other, new services playgrounds, mobile and VoIP.
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