Channel service units (CSUs) and data service units (DSUs) are required to interface with digital T-1, T-3, fractional T-1 and T-3, and 56 Kbps lines. CSU/DSUs are supplied in one integrated piece of equipment. The CSU plugs into the network jack. The DSU connects to the customer's equipment, such as the T-1 or E-1 multiplexer. CSU/DSUs are generally cards within multiplexers, IADs (Integrated Access Devices), and PBXs rather than standalone, external devices. A CSU/DSU operates at Layer 1 (the physical layer) of the OSI model.
Maintenance and performance tests are done from the CSU/DSU to determine if a repair problem is in the equipment, the CSU/DSU, or the telephone line. The CSU also provides clocking and signal reshaping. The clocking function is responsible for sending out bits in an evenly timed fashion. If the clocking is off, the transmission will not work. In this case, the technician might say, "the line is slipping," or "the timing is off." The CSU also provides framing, in which the starting and ending points for each channel are set and monitored. The DSU makes sure the correct positive and negative voltages are present on the signals from the multiplexer to the CSU.
CSUs use mainly extended superframe (ESF) so that T-1 and T-3 circuits can be monitored while a line is in service. Network service providers have extended superframe CSU/DSUs in their networks. Earlier CSUs used superframe (SF), which required taking the circuit out of service for many maintenance functions.
CSU/DSUs are also made as separate physical products; CSUs and DSUs. Either or both may be part of a T-1 WAN card inserted into a data terminal equipment such as a router.
*In the picture below, the RJ-45 cable connects the CSU to the "Telcom Demarc" which would be the data service jack (network jack). The v.35 cable connects the DSU to the customer's equipment (in this case the router).
[Source: http://www.more.net/technical/netserv/routers/cisco1720/images/dsu-router-connection-w.jpg]
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