With ISDN, when you speak, or otherwise send out data, the NT1 puts this digital information on the phone line. If the other side speaks at the same time, then both conversations (voice or data) are on the line at the same time. Additionally, discontinuities like kinks or splices in the wires create echoes that interfere with the data. Therefore, the NT1 on your wall works in tandom with a similar device at the other end of your line at the phone company to provide what is called “Echo Cancellation”. The NT1 at your end will remember the packet of data it has just sent and will listen to the incoming data and remove the “echo” of what it has just transmitted. What is left is the incoming data, pure and clear.
The NT1 also converts the line from the single-pair, full duplex wiring on the phone company side of the NT1 to a two-pair line with separate transmit and receive lines on the subscriber side. With separate transmit and receive signals, multiple devices can co-exist on the circuit, much like freeway exits provide smooth flow on a divided highway.
Each ISDN phone line from the phone company (called the Network loop or U-Loop) to the subscriber (that’s you), can use the same 2-wire connection that your analog line currently uses, and can extend up to 3 miles without signal boosting. Using only two wires for digital data saves costs on the wire, but requires sophisticated decoding equipment for echo cancellation at each end. The phone company terminates each 2-wire ISDN line at the customer premises, called the Subscriber/ Termination (S/T) interface, at a box called the Network Terminator (NT1). On the Subscriber side of the NT1, an 8-wire interface is used (2 transmit lines, 2 receive lines, 2 power lines, and two unused).
In most countries with government-operated telephone agencies, the NT1 belongs to the phone company, and the user may only connect to the 8-wire “S” (S/T) interface. In the U.S., the phone company’s responsibility is limited to bringing phone lines to the Main Point of Entry (MPOE) at the building. This may not be the most feasible place to terminate the “U” interface. Thus, U.S. customers are allowed to connect to and extend the U-loop on their premises, and then add the Network Terminators where needed. Therein lies the unique U.S. problem of choosing between product with or without a built-in NT1.
With the S-interface, you can have up to eight addressable ISDN devices connected to your line, and up to two can be active at any one time (because each ISDN line has two channels). If you choose not to have an NT1, but instead connect directly to the phone company’s 2-wire U-interface, then you can have only one dedicated device on the line, since it must handle the specialized decoding mentioned previously.
There are different protocols and different electrical specifications and FCC requirements for both types of devices. If you plan to dedicate your ISDN line to only one purpose, then you could obtain product that has a built-in NT1 and eliminate some clutter. If you would like the ability to add on new ISDN devices in the future, then you would want to get an external NT1 that has multiple jacks for multiple devices. Also, if you would like to retain some of your analog features (fax, modem, favorite telephone set), then there are special NT1s that have built-in analog conversion so that you can use both ISDN and analog equipment.