Managing the Digital Firm, Seventh Canadian Edition
CHAPTER 7
Telecommunications, the
Internet, and Wireless
Technology
LEARNING OBJECTIVES
After reading this chapter, you will be able to answer the following questions:
1. What are the principal components of telecommunications networks and key
networking technologies?
2. What are the different types of networks, transmission media, and Internet
connections?
3. How do the Internet and Internet technology work, and how do they support
communication and e-business?
Teaching Suggestions
Chapter 7 presents crucial concepts and terminology since telecommunications,
networks, and the Internet are now introducing fundamental changes in businesses. The
opening case, “RFID and Wireless Technology Speed Up Production at Continental
Tires,” illustrates some of the new capabilities and opportunities provided by
contemporary networking technology.
Managing the Digital Firm, Seventh Canadian Edition
tires per day. Using a wi-fi wireless network and RFID tags, the company installed the tags
on each of its carriers. As the carts move about the manufacturing floor, location
information is transmitted to the wireless network. Handheld computers are used to confirm
that the carriers have been loaded with components or have arrived at a specific workstation.
Section 7.1, “Telecommunications and Networking in Today’s Business World”
Telecommunications and networks are vital to the majority of businesses today, and this
section explains why. Since telecommunications technology serves as the foundation for
electronic commerce and the digital economy, the concepts and terminology in Chapter 7
are important for both MIS and business majors. This section explains the basic
configuration of networks, regardless of their size.
You may want to contrast the origin and history of telephone networks and computer
networks. Then diagram how the two are converging into one pipeline for all types of
communication transmissions. Convergence is leading to more efficient transmission
traffic and ubiquitous communications thanks to the Internet.
Managing the Digital Firm, Seventh Canadian Edition
Section 7.2, “Communications Networks”
It may help for you to bring several props to show the different transmission media
explained in this section. For example, bring twisted wire, coaxial cable, and fiber-optic
cable to show to the class and discuss the advantages and disadvantages of each type of
Section 7.3, “The Global Internet”
Most students are familiar with the Internet and motivated to discuss it. You might begin
this section by asking students how they spend their time on the Internet and how their
online activities have changed since they started using the Internet. Also, ask them to
identify which client platforms they currently use or have used. Ask your students to
Make students aware that while the new information technology infrastructure provides
many benefits and capabilities, it does require careful management and planning.
Managing the Digital Firm, Seventh Canadian Edition
WINDOW ON ORGANIZATIONS: THE BATTLE OVER NET
NEUTRALITY
Case study questions
1. What is network neutrality? Why has the Internet operated under net neutrality
up to this point in time?
Network neutrality is the idea that Internet service providers must allow customers
2. Who is in favor of network neutrality? Who is opposed? Why?
Those in favour of network neutrality include organizations like MoveOn.org, the
Christian Coalition, the American Library Association, every major consumer group,
many bloggers and small businesses, and some large Internet companies like Google
Those who oppose network neutrality include telecommunications and cable
companies who want to be able to charge differentiated prices based on the amount of
bandwidth consumed by content being delivered over the Internet. Some companies
3. What would be the impact on individual users, businesses, and government if
Internet providers switched to a tiered service model?
Proponents of net neutrality argue that a neutral Internet encourages everyone to
innovate without permission from the phone and cable companies or other authorities.
4. Are you in favour of legislation enforcing network neutrality? Why or why not?
Student answers will vary. Some components and principles to consider in answering
this question include:
• Price differentials: how much more would heavy bandwidth users pay than those
WINDOW ON MANAGEMENT: MONITORING EMPLOYEES ON
NETWORKS: UNETHICAL OR GOOD BUSINESS?
Case study questions
1. Should managers monitor employee e-mail and Internet usage? Why or why not?
Answers will vary on this question. The case study statistics show that corporate misuse
and abuse of e-mail for personal reasons is exploding. Simply stated, employees who
profits for their shareholders. Managers certainly should be concerned with the loss of
2. Describe an effective e-mail and Web use policy for a company.
Like all policies an effective e-mail and Web use policy must be carefully designed
and clearly communicated to all persons who use these corporate resources. There are
a number of different policies in existence. Some companies allow absolutely no
3. Should managers inform employees that their Web behaviour is being
monitored? Or should managers monitor secretly? Why or why not?
Opinions will vary according to personal values and workplace experiences.
However, most students will probably answer that managers should inform
employees that their Web behaviour is being monitored as a way to foster open
Section 7.4, “The Wireless Revolution”
Ask your students how many of them use cellular phones, smartphones, wireless laptops,
tablet computers, or wireless e-book readers. Most students are excited to demonstrate their
“latest devices”, and you may wish to ask one of them to discuss the capabilities of theirs.
Ask them to discuss what they like or dislike about the features found on their appliance.
Managing the Digital Firm, Seventh Canadian Edition
If you have the class time, you can ask the campus IT director to discuss the
Review Summary
1. What are the principal components of telecommunications networks and key
networking technologies?
2. What are the different types of networks, transmission media, and Internet
connections?
3. How do the Internet and Internet technology work, and how do they support
communication and e-business?
4. What are the principal technologies and standards for wireless networking,
communications, and Internet access?
5. Why are RFID and wireless sensor networks (WSNs) valuable for business?
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
3G Networks 229
4G networks 229
Hertz 211
Hotspots 230
Managing the Digital Firm, Seventh Canadian Edition
Packet switching 207
Peer-to-peer 210
Personal area networks (PANs) 229
Switch 206
T1 lines 212
Telnet 217
Review Questions
1. What are the principal components of telecommunications networks and key
networking technologies?
Describe the features of a simple network and the network infrastructure for a
large company.
A simple network consists of two or more connected computers. Basic network
components include computers, network interfaces, a connection medium, network
Name and describe the principal technologies and trends that have shaped
contemporary telecommunications systems.
Client/Server computing, the use of packet switching, and the development of widely
Managing the Digital Firm, Seventh Canadian Edition
Client/Server computing has extended to networking departments, workgroups, factory
floors, and other parts of the business that could not be served by a centralized
2. What are the main telecommunications transmission media and types of
networks?
Name the different types of physical transmission media and compare them in
terms of speed and cost.
Typical speeds and costs for several of the transmission media are provided below.
Medium
Speed
Cost
Twisted wire
up to 100 Mbps
Low
Microwave
up to 600+ Mbps
Satellite
up to 600+ Mbps
Coaxial cable
up to 1 Gbps
Fiber-optic cable
up to 6+ Tbps
High
Define a LAN, and describe its components and the functions of each component?
A LAN is a telecommunications network that is designed to connect personal
computers and other digital devices within a half-mile or 500-meter radius. LANs
typically connect a few computers in a small office, all the computers in one b, or all
the computers in several buildings in close proximity. LANs require their own
dedicated channels.
Components of a typical LAN consist of: Computers (dedicated server and clients), a
network operating system (NOS) residing on a dedicated server computer, cable (wiring)
connecting the devices, network interface cards (NIC), switches or a hub, and a router.
• NIC each computer on the network contains a network interface device.
Managing the Digital Firm, Seventh Canadian Edition
• Client computers are connected to one another.
• Switches or hub act as a connection point between the computers. Hu are very
Name and describe the principal network topologies.
The principal network topologies include:
• Star topology: All devices on the network connect to a single hub and all network
traffic flows through the hub.
3. How do the Internet and Internet technology work and how do they support
communication and e-business?
Define the Internet, describe how it works, and explain how it provides business
value.
The Internet is a vast network of computers that connects millions of people a over
the world. The Internet uses the client/server model of computing and the TCP/IP
network reference model. Every computer on the Internet is assigned a unique
Managing the Digital Firm, Seventh Canadian Edition
Explain how the Domain Name System (DNS) and IP addressing system.
The Internet is based on the TCP/IP networking protocol suite. Every computer on the
Internet is assigned a unique Internet Protocol (IP) address, which currently is a 32-bit
number represented by four strings of numbers ranging from 0 to 255 separated by
periods.
List and describe the principal Internet services.
The major Internet services include:
• E-mail person-to-person messaging; document sharing.
Define and describe VoIP and virtual private networks and explain how they
provide value to businesses.
• Voice over Internet Protocol (VoIP) enables Internet technology to be used for
telephone voice transmission over the Internet or private networks. VoIP offers