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Chapter 13 - Data Communications: Adaptation 1979-1986

13.2 The T-1 Multiplexer

T-1 multiplexers interconnect by multiplexing and de-multiplexing many slow speed data and/or digitized voice circuits through a T-1 circuit. The first generation T-1 multiplexers were designed for data circuits, but interconnected digitized voice circuits. Known as point-to-point T-1 multiplexers, they differed radically from the existing paradigm of statistical multiplexers because they could accommodate larger number of input circuits and the digital output circuits fed into channel banks not modems. First generation T-1 multiplexers gave users very little management control. But second generation “networking” T-1 multiplexers gave users first manual, and increasingly automatic, rerouting of circuits; adaptive bandwidth management; flexible configuration of network topologies; reliable system reliable architectures and much more. The history of which firms correctly anticipated how quickly the sophistication of T-1 multiplexers would evolve determined the outcome of market competition and thus those firms that grew and those that did not.

The size and growth rate of the T-1 multiplexer market was directly related to the number of T-1 circuits. Each end of a T-1 circuit, or termination, represented the need for a T-1 multiplexer. The first installations of T-1 circuits were local circuits connecting a corporation’s circuits through a central office (CO) or bypassing the CO and directly interconnecting a corporation’s locations or facilities. Up until around 1985, the demand for T-1 circuits exceeded the ability of the RBOCs to install them and that, in turn, drove the demand for private by-pass networks. (See Exhibit 13.1 T-1 Installed base 1984-1988) By 1988, the importance of private by-pass networks declined as either AT&T/IXCs (Interexchange carriers) or the RBOCs were able to supply the needed T-1 circuits. As the Exhibit shows, the growth in terminations, while somewhat erratic, grew dramatically between 1984 and 1988.

Exhibit 13.3.1 T-1 Installed Base 1984-1988 (Thousands)

T-1 Terminating Points 1984 1985 1986 1987 1988
Long Haul Via AT&T / IXCs   1.4 2 3 4
Local RBOC Intra LATA   6 9 13 18
Private By-Pass Networks   4 5 7 9
All T-1 Lines 7.5 11.4 16 23 31
All T-1 Terminations 15 22.8 32 46 62
Annual Growth T-1 Terminations 5 7.8 9.2 14 16
Annual Growth Rate T-1 Terminations   56% 18% 52% 14%