A leased line is a permanent telephone connection between two locations that provides a predetermined amount of bandwidth at all times. Leased lines can be analog or digital, although most of the leased lines installed today are digital. The most common leased line configuration in the United States is called a T-1, which runs at 1.544 Mbps. In Japan, the same type of connection uses the name J-1. The European equivalent of a T-1 is called an E-1, which runs at 2.048 Mbps. Many organizations use T-1 lines to connect their networks to the Internet or to connect remote networks together. For applications requiring more bandwidth, a T-3 connection runs at 44.736 Mbps, an E-3 runs at 34.368 Mbps, and a J-3 runs at 32.064 Mbps. These designations are collectively known as T-carrier, E-carrier, and J-carrier services, respectively.

Digital Signals Framing Method

Leased line services use a framing method called Digital Signal 1 (DS1). A DS1 frame con- sists of 8-bit channels called Digital Signal 0s (DS0s), plus a framing bit used for synchroniza- tion. A T-1 has 24 such channels, as does a J-1; an E-1 has 32 channels. Each DS0 is sampled 8,000 times per second, resulting in discrete 64-Kbps channels. In a T-1, 24 64-Kbps channels with framing bits equals 1.544 Mbps. This transmission technique is called time division multiplexing.

(24 channels/frame × 8 bits/channel + 1 framing bit/frame) × 8,000 frames/sec = 1,544 Kbps or 1.544 Mbps

Faster connections use successive digital signal levels, the definitions of which vary according to region.

Limited Overheads

A T-carrier connection uses the framing bits, also called synchronization bits, to ensure that both ends of the connection mark the beginning of each frame. This ensures that the data stream in each channel remains separate from the others. This is the only overhead between the two connected points. Because a leased line is a point-to-point connection between two systems only, there is no need for any sort of addressing, as on an Ethernet network. Because the connection is permanent, there is no need for a connection establishment process or a negotiation of protocols, as in a Point-to-Point Protocol connection.

Original Use

T-carrier services were originally designed for telephony. When a large organization installs its own telephone system, the private branch exchange (PBX) or switchboard is connected to one or more T-1 lines. Each T-1 line is split into the 64-Kbps channels, and each channel can function as one voice telephone line. The PBX allocates the channels to the various users of the telephone system as needed. However, when you use a leased line to connect networks together, you can combine the channels into a single data pipe, or configure them in any combination of voice and data.

Fractional T-1

You can also install a leased line that uses some, but not all, of the channels in a T-1. This is called a fractional T-1 service, and you can use it to specify exactly the amount of bandwidth you need.

Telephony Providers

A T-3 connection is the equivalent of 672 channels of 64 Kbps each, or 28 T-1 lines. This much bandwidth is usually required only by large corporate networks, Internet service providers (ISPs), and other service providers with a need for huge amounts of bandwidth. To install a leased line, you contract with a telephone provider to furnish a link between two specific sites, running at a particular bandwidth. Leased line prices depend on the amount of bandwidth and the distance between the sites, but a T-1 connection can easily cost thousands of dollars per month, plus installation and equipment fees at both ends. At each end of the connection, you must have a device called a channel service unit/data service unit (CSU/DSU), which you Key connect to your data network by using a router (or a PBX, in the case of a voice network).


The leased line enters the customer’s premises and terminates at the CSU/DSU, which functions as the demarcation point, or demarc. A CSU/DSU is actually two devices that are always combined into a single unit that looks something like an external mo- dem. In fact, CSU/DSUs are sometimes called digital modems, a term that is incorrect. The CSU part of the device provides the terminus for the digital link and keeps the link alive when no traffic is passing over it. The CSU also provides diagnostic and testing functions. The DSU part of the device translates the signals generated by the LAN equipment into the bipolar digital signals used by the leased line.

Leased Line Prices

A leased line contract typically quantifies the quality of service the subscriber will receive by using two criteria: service performance and availability. The performance of the service is based on the percentage of error-free seconds per day, and its availability is computed in terms of the time that the service is functioning at full capacity during a three-month period, also expressed as a percentage. The contract will specify thresholds for these statistics, such as a guarantee of 99.99% error-free seconds per day and 99.96% service availability over the course of a year. If the provider fails to meet the guarantees specified in the contract, the customer receives a financial remuneration in the form of service credits.

Popular WAN solution

Leased lines are a popular WAN solution, particularly for LAN-to-LAN connections, because they supply a consistent, symmetrical amount of bandwidth. However, they do have a significant disadvantage. Because the link is permanently connected, you pay for a specific amount of bandwidth 24 hours a day. If your applications do not run around the clock, you might end up paying premium prices for bandwidth you are not using.

Flexible Contracts

Formerly, the bandwidth of a leased line was set at a particular rate. If your bandwidth needs exceeded the capacity of the line, the only way to augment your connection was to install another line. Today, flexible-rate connections are available from most service providers. You pay for a particular rate and can burst to a higher rate during peak traffic periods, pay- ing extra when you do. Leased line connections can also be upgraded, by changing the CSU clocking at both ends.

As a result, leased lines are excellent solutions for some applications but can be less cost- effective for others.