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Chapter 3
Telecommunications and Networking
Objectives and Overview
Chapter 3 is the second of three chapters devoted to the building blocks of information
technology. The primary objective of this chapter, unsurprisingly, is to provide the manager with
the information about telecommunications and networking that he or she needs to know. Chapter
3 emphasizes the terminology and concepts relating to telecommunications and networking, as
well as the roles and general capabilities of various types of transmission media and networks.
In the Seventh Edition, the telecommunications and networking chapter has been substantively
rewritten and updated. In the Fifth Edition, the discussion of wireless communication including
Wi-Fi, Bluetooth, and RFID was greatly expanded to reflect its growing importance. The Sixth
Edition added even more on wireless communication, including WiMAX networks. Other new
topics in the Sixth Edition included Internet telephony (VoIP), the new Internet2 network, and
We believe that it is useful to view this chapter as consisting of three major sections. The first
major section includes the introduction, a short section describing the primary reasons for
networking, and an equally short overview of telecommunications and networking. The second
major section systematically presents the key elements of telecommunications and networking,
Chapter 3 is both easier and harder to teach than the preceding chapter. It is easier in that much
of the chapter is new material to virtually all the students; only in rare cases will you encounter a
graduate student or advanced undergraduate student with significant background in
your students. Chapter 3 is harder to teach in that it is very technical material and most of your
students in an undergraduate or graduate business course are unlikely to have a very strong
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The specific objectives of this chapter are:
2. To consider the meaning of the terms telecommunications and networking and to consider the
primary functions performed by a telecommunications network
3. To introduce several basic ideas about telecommunications, including analog and digital
4. To describe the various types of transmission media
5. To describe the various configurations or topologies of networks
7. To describe how the various elements of the networks communicate with one another through
8. To introduce a number of very important networking concepts, including Wi-Fi, WiMAX,
Bluetooth, RFID, VoIP, packet switching, cable modem, DSL, OSI, and TCP/IP
10. To consider the three major segments of the telecommunications industry the carriers, the
equipment vendors, and the service providers
Teaching Suggestions
For most courses graduate and undergraduate, required and elective we would spend two 75-
minute classroom sessions on Chapter 3. Unless your class has an extraordinarily strong or
extraordinarily weak background, we suggest spending all of one 75-minute period and about half
of the second period in a straightforward lecture/discussion approach, using the PowerPoint slides
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Review Questions
1. What are the primary reasons for networking among computers and computer-related
devices?
2. Explain the difference between analog and digital signals. Is the trend towards more use
of (a) analog or (b) digital signals in the future?
An analog signal uses a physical quantity (e.g., voltage) that varies continuously as a function of
3. What is a modem? When and why are modems necessary? What is a cable modem, and
how does it differ from a traditional modem?
The term modem stands for modulator-demodulator. A modem is used to convert data from
digital to analog form to allow it to be transmitted over an analog telephone network. A modem
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4. List the primary types of physical media in use in telecommunications networks today.
Which of these media has the fastest transmission speed? The slowest transmission speed?
5. Describe the similarity between the bus and the ring topology; then describe the
similarity between the star and the tree topology.
6. Identify the following acronyms or initials:
LAN: local area network, a data-only (usually) network of computers with a peer-to-peer
relationship, generally operating in an area no more than 2 or 3 miles in diameter
WAN: wide area network, a potentially global network usually employing point-to-point
transmission that relies on the telephone network
LEO: low earth orbit (satellite), a satellite orbiting at only 400 to 1,000 miles above the earth
Chapter 3 Telecommunications and Networking
VPN: virtual private network, a network connection which provides the equivalent of a private
packet-switched network using the public Internet
7. What is Bluetooth? Give examples of its use.
Bluetooth is short-range radio technology that has been built into a microchip, enabling data to be
8. Explain the difference between Wi-Fi and WiMAX networks. Which of these network
types is more important today? Is this likely to change?
9. What is the Internet? What is an intranet? How are they related?
The Internet is a global network of networks using the TCP/IP protocol, with gateways to
10. What is the World Wide Web, and how does it relate to the Internet?
11. Two important sets of protocols discussed in this chapter are OSI and TCP/IP. In one
or two sentences per protocol, tell what these initials stand for and describe the basic
purposes of these two protocols.
Discussion Questions
1. Discuss the advantages and disadvantages of the four primary types of local area
networks contention bus, token bus, token ring, and wireless.
Contention bus LANs dominate the office environment, so technicians are familiar with
troubleshooting and maintenance. They are relatively easy to set up and operate, because they are
usually based upon wiring that connects each computer to a wire center (that is, a logical bus but
An advantage of the token ring for a heavily loaded network is that little degradation in
performance occurs for utilization rates up to 70%. Token ring networks, like contention bus
LANs, are usually based upon wiring that connects each computer to a wire center (that is, logical
ring but physical star setup). In the cases of both the contention bus and token ring, in theory a
malfunction in any part of the wiring causes the entire system to shut down. In practice, however,
both the contention bus and token ring topologies eliminate the problem of the entire network
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2. What are the key differences between a LAN and a WAN? Are the differences between a
LAN and a WAN becoming greater or less? Explain.
A WAN differs from a LAN in that a WAN spans much greater distances (often entire countries
or even the globe), has slower data rates, and is usually owned by several organizations
3. As noted in the chapter, the most common transmission medium is the twisted pair. Is
this likely to continue to be true? Why or why not?
Twisted pair is commonly used in telephone lines and offers an inexpensive and reliable medium.
4. Explain the differences between accessing the Internet via a modem, DSL, a cable
modem, and satellite. Which of these access mechanisms are likely to become more
important in the future?
Until the twenty-first century, most connections to the Internet from home or a small office were
made from a dial-up modem, operating at data transfer rates up to 56 thousand bits per second
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(kbps). Most such modems are built into the computer. This connection uses an ordinary
telephone line to connect the user to an Internet service provider, and the telephone line is tied up
for the duration of the Internet connection.
5. Why is the idea of a standard network protocol, such as the OSI reference model,
important? What are the advantages and disadvantages of developing a single standard
protocol?
6. Has the popularity of the Internet and the related adoption of TCP/IP by many
organizations and networks helped or hindered the movement towards a single standard
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protocol such as OSI? Why?
One possible answer: The Internet has helped the movement toward a standard protocol for
networking. TCP/IP is widely used in LANs, WANs, UNIX, Linux, Windows, the Internet, and
7. Find out what types of computer networks are used at your organization (either the
university at which you are taking this course or the company for which you work). Does
your organization have an intranet? Does your organization have one or more LANs?
What types of LANs does your organization use? Does your organization operate a WAN?
Is your organization linked to the Internet? Speculate on why your organization has
developed this particular network structure.
8. Consider a large company with which you are somewhat familiar (because of your own
the company). Use your imagination to suggest new ways in which the Internet could be
used in this company.
9. Consider a particular small business with which you are familiar (as a customer, as a
current or former employee, as a relative of the owner). Describe the current
telecommunications employed by the business. In what ways might telecommunications
and networking be used to improve the profitability of this business? Consider, as
appropriate, such ideas as the use of facsimile communication, telemarketing, enhanced
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communication through a local area network, a Web home page, acceptance of orders over
the Web, and smartphones for employees.
10. Discuss the advantages and disadvantages of wireless communication, such as Bluetooth
and wireless LANs, compared to wired communication. Using your knowledge and your
personal crystal ball, will wireless communication become more or less important in the
future? Why?
The primary advantage of wireless communication is obvious: no wires. This means it is easier
11. Cellular telephone service has certainly become more important vis-à-vis wired
telephone service over the past decade. Will this trend continue? How will the trend
toward cellular service be affected by other developments in telephony such as massive
increases in bandwidth through fiber-optic technology and the wider use of telephony over
the Internet?
One possible answer: In the short run, the trend toward cellular telephone service will continue.
12. Explain, in your own words, the concept of cloud computing. Do you believe that cloud
computing will have a major impact on the IT function in organizations? Why or why not?
In your opinion, what are some factors that will hold back the growth of cloud computing?
Cloud computing means obtaining IT capabilities (i.e., hardware, software, or services) from an
outsi
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The details of cloud computing are still evolving, but there are three basic types of cloud
computing. Infrastructure as a Service (IaaS) also called utility computing provides the
computing capabilities (i.e., servers, networks, storage, and systems software) to augment or
replace the functions of an entire in-house data center. Such services are offered by traditional