ISDN
ISDN replaces the local loop with a full duplex digital pipe consisting of a number of different 'channels', the most important of which are the B-channel (bearer) and the D-channel (data). Despite its name, the D-channel does not, in fact, (usually) carry data. It is actually used for control signals, while the B-channel carries both voice and data communications.
Note: ISDN does not usually replace the actual copper wire between the subscriber's premesis and the exchange, but rather replaces the equipment at both ends, since it is this that is the factor that limits the speed of the line.
ISDN was conceived as a way to carry voice and data over the same network efficiently, and this unification process came before considerations of bandwidth. Consequently, a standard B-channel has a data rate of only 64Kbps (the standard telephone channel has a bandwidth of 64KHz).
There are two major forms of ISDN available. These are Basic rate interface (BRI) and Primary rate interface (PRI). To find out more about these two different types, click here.
Increasing bandwidth with ISDN
It is possible to "bond" multiple ISDN lines together to get a faster connection. E.g., if you have a BRI ISDN line, you could bond both the B-channels together to get one 128Kbps connection, instead of two 64Kbps connections. However, if you do this, then you are effectively making two phone calls, so if you are being charged for online time by the minute (as in the UK) then your phone bill will be twice as high. This principle applies to PRI ISDN as well.
Where next?
So we have established that ISDN is not much faster than a modern modem unless channel bonding occurs, and this is an expensive option to gain bandwidth. So what are the benefits of ISDN, then? Well, these days, not very many. However, since an ISDN connection is digital from end to end, connection time is almost negligible (~1 second), compared to connection time for a modem (~30 seconds) giving the impression of an always-on connection to the network.
Links
ISDN Zone
Dan Kegel's ISDN page
Introduction - Modems - ISDN - DSL - cable modems - Mobile comms - Conclusion - Glossary
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Modems