Another option available to business users is VPN. VPNs offer enterprise customers the benefits of a private network (CUG) without the administration or equipment hassles of a large tie-line network (a tie-line is simply a permanent circuit between two points).

A VPN enables an enterprise customer to dial a specific number, which then directs the PSTN to treat the customer as a CUG. Say, for example, that a large retail corporation with offices throughout the U.S. does not want to have key-systems or PBXs in each of its 3000 stores. That would be a large network to manage and administer.

This retail corporation decides to contract with a long-distance (IXC) company to provide a VPN for all 3000 of its retail stores. Each store has its own four-digit store ID, assigned by the company, which is used for intercompany business. Therefore, the store ID is a good way to uniquely identify each branch of the retail operation. Figure 2-1 shows a graphical representation of the potential network and call-flow.

Figure 2-1. Virtual Private Network

Figure 2-1. Virtual Private Network

The IXC gives the retail store a phone number to dial—1-700-123-3154. The IXC informs the LEC to hand off the call to the IXC so that the IXC knows which dial plan applies to the incoming number. (The last four digits of the dialed number correspond to the store ID.)

The store ID for the store in San Jose, California, for example, is 5134. Store 5134 is running low on toasters and needs to call the nearby store in Fremont (Store 3154). The old method was to look at a lengthy table and place a long-distance call from the 1-408 (San Jose) area code to the 1-510 (Fremont) area code. Today, Store 5134 only needs to know the ID of the Fremont store and can dial 1-700-123-3154 to reach that store.

The IXC translates the 1-700-123-3154 number to the "real" telephone number assigned by the local LEC, but this is completely transparent to the retail store clerks. (As a side note, the Fremont store had the toasters and sent them over right away.)

By referring to Figure 2-1, you can step through the call in more detail:

1. The user in San Jose dials 1-700-123-3154.

2. The LEC receives the dialed digits.

3. The LEC switch sends those digits to the IXC.

4. The IXC receives the digits 1-700-123-3154, knows this is a VPN, and translates the digits to 1-510555-6025, which is the true phone number for the Fremont retail store.

5. The IXC sends the call to the local LEC as 1-510-555-6025 because that is what the LEC can understand. If the IXC had sent 1-700, the LEC would route the call back to the IXC.

6. The LEC receives the call from the IXC.

7. The LEC looks up the particular local line for 555-6025 and routes the call to that local loop.

8. The retail store receives the call, not knowing that it was routed through the VPN.

VPN enables the enterprise to save money on internal IS costs as well as provides the enterprise with a simpler network for all 3000 of its remote offices to use.

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