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The telephone system has evolved from an analog system to a digital system, at least in the core. Early core transmission facilities used frequency division multiplexing, but in the 1960s this system was largely replaced with the PDH (plesiochronous digital hierarchy), which is a system of multiplexing numerous individual channels into higher-level channels. The system is not synchronous like SONET, but integrates with it, as discussed later. The North American version of PDH is called NADH (North American Digital Hierarchy).

The hierarchy uses TDM (time division multiplexing). In this scheme, a circuit is divided into a continuous stream of time slots and multiple channels are multiplexed into the circuit. Traditionally, each channel was a digitized voice call, but video information and data may also occupy a channel. The basic channel is 64 Kbits/sec, which is the amount of bandwidth required to transmit a voice call that has been converted from analog to digital using a sampling rate of 8,000 times per second with the sample represented as an 8-bit value (8 × 8,000 = 64 Kbits/sec). See "T Carriers" for more on this.

The following table outlines levels in the hierarchy. Levels not shown are used internally by the carriers. The basic channel is a DS-0. A total of 24 DS-0s can be multiplexed into a DS-1, and up to 672 can be multiplexed into a DS-3. Note the last entry is an OC (optical carrier), which is listed to illustrate the next step up in the hierarchy.

A T1 circuit is a DS-1 link over two twisted-pair copper cables. It consists of 24 DS-0 channels for a total throughput of 1.544 Mbits/sec, including overhead. A T3 line consists of 24 T1 lines. The phone companies used T carrier lines between its switching offices until the 1980s, when they began deploying fiber-optic cable. T1s, fractional T1s, and T3s are now sold to companies and service providers as access links into carrier networks or as private lines between company sites. They even carry ATM and frame relay traffic. See "E Carriers," "T-Carriers," and "TDM Networks." See "Network Core Technologies" for an historical perspective on the TDM hierarchy.

SONET (Synchronous Optical Network) and the SDH (Synchronous Digital Hierarchy) define synchronous network hierarchies for transmitting information over optical fiber ring networks. SONET/SDH accommodates the NADH hierarchy. For example, a SONET ADM (add/drop multiplexer) will merge a 45-Mbit/sec DS-3 channel into a 52-Mbit/sec OC-1 channel. See "SONET (Synchronous Optical Network)" and "SDH (Synchronous Digital Hierarchy)."

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