Legacy Systems
Legacy systems consist of a hosted network service - Centrex,4 or as premise-based PBX, Key System and Hybrid Key Systems.
Centrex is a LEC central office based business telecommunications system that permits customers to identify and select a variety of features to be deployed on telephone stations. A Centrex business system consists of an access line, or loop, for each station on the system and both ordinary and special functions provided by the LEC's central-office switch. A Centrex business system allows feature selection to be customized at the customer's option for any business with two or more lines. Ongoing customer requirements for Centrex are met through technology upgrades deployed at the central office. Both analog and digital formats are available.5 By outsourcing their telephone system, companies can concentrate on their core competencies. Centrex can also be considered an expensible monthly charge versus the outlay-based PBX systems.
A PBX system is a customer-owned premise-based system that literally allows customers to perform and use the same functions as Centrex. PBX owners are responsible for upgrading, maintaining, and programming of their premise-based system. PBX owners also use telephone sets similar to Centrex.6
A Key System is comprised of telephone sets, business access lines, and subscriber features. A Key System has much of the same feature functions as PBX and Centrex, but is not connected to a "system" that allows a dialing plan or "network" features.7 Key systems cannot support a large number of lines but are more economical than PBXs for a small number of lines, and are typically used by small companies with 40 or fewer lines.8
PBXs are differentiated from key systems in that users of key systems manually select their own outgoing lines, while PBXs select the outgoing line automatically. Hybrid systems combine features of both. Centrex and CentraNet compete with PBX equipment available from many suppliers. PBX equipment offers a variety of optional features, but access to the public switched network is only available through a trunk line purchased from the LEC.9
Centrex/CentraNet and PBX systems are close substitutes, and both services are discretionary alternatives to business basic exchange service with added features. Businesses with a large enough number of telephone stations may find it cost-effective to buy PBX switch equipment from the same manufacturers who provide the switches the LECs use in their central offices.10
4 AT&T California's Centrex and [Verizon's] CentraNet are similar services designed to serve businesses with multiple telephone stations. Several other LECs offer Centrex-like service under their own product names. Our general references to Centrex and CentraNet services should be read to include the other LECs' Centrex-like services. Alternative Regulatory Frameworks for Local Exchange Carriers, D.94-09-065, September 15, 1994, at 190.
5 In the Matter of the Application of Pacific Bell for Authority to Categorize Centrex , D.00-05-020 at 13.
6 Id. at 15.
7 Id.
8 TIA's 2009 ICT Market Review and Forecast, Telecommunications Industry Association, 2009.
9 Centrex and CentraNet equipment is located in the LECs' central offices, while the PBX switching equipment is purchased or leased by the customer and located on the customer's premises. The advantage usually attributed by the LECs to Centrex and CentraNet is greater reliability because the equipment is supported by emergency backup power and maintained as part of the LEC's central office equipment. The advantages attributed to a PBX are that monthly recurring charges for stations and features are avoided, and more custom features are available. Centrex and CentraNet services require a discrete pair of wires to the LEC central office for each separately numbered telephone station. A PBX typically uses trunk lines from the LEC's central office to serve five to ten numbered stations per trunk, depending on the size and type of the customer's business. Although Centrex or CentraNet customers generally do not need to purchase as much telecommunications equipment as PBX customers do, Centrex and CentraNet customers must still purchase the individual telephone sets, answering machines (if desired), and other optional equipment. D.94-09-065, at 190.
10 Both Centrex or CentraNet and PBX services allow callers from each telephone station to dial other internal stations directly. Centrex and CentraNet services allow internal dialing using an abbreviated number (the last five digits of the public number) while PBX equipment may be programmed to use even more abbreviated dialing codes. Because Centrex and CentraNet lines are switched at the LEC's central office, callers from outside the system may dial a Centrex/CentraNet station the same way they would dial any other telephone number. Centrex and CentraNet receive this feature automatically as part of the service, at no added charge. To have exactly the same service, the PBX customer must pay the LEC a monthly rate for a feature called Direct Inward Dialing (DID). If the PBX wants certain numbers to rotate (be transferred) to other numbers when lines are busy or not attended, the customer must also pay a monthly rate for a number of trunks in rotary to receive the service. This service is called Rotary, Line Hunting, or Hunting. Id. at 191.
