On-Net vs Off-Net

and "Virtual On-Net"

These two terms differentiate customers that are directly connected and indirectly connected to a voice (switched) network.  There are two ways of defining these networks:

VPN, Virtual Private Networks On/Off Net -  Direct connections to a voice VPN (Virtual Private Network are considered On-Net, vs those that are not (Off-Net).   

LD, Long-Distance Networks On/Off Net -  Customer that are either directly connected via dedicated lines, or connected via the LEC (i.e. PIC's to a specific long-distance carrier) are considered On-Net.  Customers whose long distance service is supplied by any other vendor is Off-Net.

Consequently, for both definitions - this defines 4 types of calls:

LD (Long Distance) On/Off Net

On-Net customers typically, but not always - get a price break when calling other On-Net customers (On to On).  For example, MCI's "The Neighborhood" plan has lower fees if both you and Grandma are signed up with their long-distance service.  The LEC sets up their database to append the CIC of MCI to all of your 1+ calls.  This is called a "Pre-subscribed" CIC, or PIC (Pre-subscribed Inter-exchange Carrier).  In essence, you are "PIC'd to MCI.

You also get a price break, although somewhat less, if you call anyone outside of the MCI network (On-Net to Off-Net calls) - which also applies of the reverse were true  .  .  .  so long as the calling party is signed up with MCI (the called party is never billed).

Of course, if both parties are not signed up with MCI  (Off to Off), then no discount is available, an in that case it is a moot point because MCI is not even involved in routing the call or billing the customer.

VPN (Virtual Private Network) On/Off Net

A virtual private network, or "VPN" is an intelligent aggregation of telephones.  It is well beyond what a local PBX offers, in that it is offered by the provider and can be set up as a Nationwide, or even Worldwide system.  All the stations (a station is basically a digital phone) that are connected into the VPN have special connection features with every other station on the VPN.  To be part of the VPN, dedicated connections to the Long-Distance carrier are normally required (i.e. T1, T3, etc). 

The most common feature is abbreviated dial.  For example, if ACME corporation has a Nationwide VPN from AT&T, anbd they have two large offices in Wash DC and Cincinnati - On-Net callers in DC can call Cincinatti On-Net stations by dialing 8-XXX-XXXX, whereas all On-Net callers must dial the full, 10-digit number, 1-513-XXX-XXXX.

Cost is the main driver here.  On-Net calls are much cheaper.  Of course, there are monthly fees.  Therefore, a company must be certain that they will have enough volume to result in an overall savings.

*** customers with a VPN can have both dedicated VPN connections (On-Net), and also dedicated PSTN connections into the LEC (Off-Net).

Off-Net calls are handled by the LEC exclusively for local calls, and long distance calls are handled by both the LEC and the IXC that the customer is “PIC’d” to (PIC = Primary Interexchange Carrier).

The 4 Types of VPN Calls

All 4 types of calls will result in a bill to the owner of the VPN, even Off-Net to Off-Net. 

Of course, a call between two people that are completely unrelated to the VPN is technically Off-Net to Off-Net, but this term is not used to describe that type of call, and instead describes incoming calls to stations on the VPN, that do not come in via the VPN.  The stations connected to the VPN also are connected to separate trunks via the PBX, that are reserved for incoming or 2-way calls outside of the VPN.  All incoming calls from out side the VPN (except for Toll-Free) are brought in via these trunks, and do not touch the VPN in any way.  This is also a security feature.

NOTE: if a customer has a VPN, he can make On-Net to Off-Net calls outgoing, but incoming calls from Off-Net locations cannot enter the VPN, and therefore are always Off-Net to Off-Net. 

Abbreviated, On-Net Dialing

VPN On-Net stations are limited in number, and therefore the intelligence of the switches can allow less digits to be entered by the caller.  The PSTN in the United States requires 10-digit dialing because there are millions of stations in the country - each needing a unique number.  VPN's can uniquely identify all stations by 7, 6, 5, or even 4 digits.  With a very small VPN, you could technically use 3 digits, but the switches usually do not allow this.  30 years ago, before the advent of VPN's, many small towns used 4-digit dialing, and they were, in essence, a VPN.

There are 3 types of outgoing calls from a VPN station (telephone).  For these we will assume the VPN uses 6-digit abbreviated dialing :

  1. VPN outside call to a PSTN station outside your VPN  (On-Net to Off-Net)  -  12 digits = 9 + 1 + 10 (PSTN number)

  2. VPN outside call to a VPN station at a remote office (On-Net to On-Net)  -  7 digits = 8 + 6 (VPN number)

  3. VPN inside call to a VPN station within your building or campus (On-Net to On-Net)  -  4 digits = extension

For the first case - normally, a 9 is dialed to notify the PBX that the caller is requesting an outside line for a PSTN call to an Off-Net location.  Abbreviated dialing uses a 5, or 8, etc to request an outside line, but one that is within the PBX.  Huge VPN's require the most digits, a maximum of seven - and small VPN's require less digits, a minumum of four.  By dialing that single-digit VPNB prefix, you are notifying the PBX that this will be a VPN call.  

    Example - your company is headquartered in Wash DC and has two sister sites in LA and
    Cincinnati.  All 3 sites are on the same VPN :

    l  to call and book a hotel room in Cincinnati - the hotel would not be part of your VPN, 
        and the call would be a standard long-distance call to an Off-Net party.  You dial:
    l  to call a co-worker, John Smith, in Cincinnati.  He is on the same VPN.   You dial:
    l  to call a co-worker in your building, he is on the same VPN but also on the same PBX.
       You dial his extension:                            4522

Each building or set of buildings that is controlled by one PBX, can place internal calls

Virtual On-Net

VPN's can also allow remote stations to be configured as Virtual On-Net.  

For the On-Net callers that are calling a Virtual On-Net station, the Virtual On-Net station appears exactly as any other On-Net station.  The fact that it is virtual is completely transparent, and the caller will use the same abbreviated dialing as all other On-Net stations use.  The intelligence of the VPN will route the call accordingly to the remote destination.  On-net  to virtual on-net calling is an access calling type that allows a caller located at a VPN on-net location to place a call to an VPN virtual on-net location.  The caller uses the same abbreviated dial, such as a seven-digit VPN directory number.  The calls terminate through the destination LEC over the Public Switch Telephone Network (PSTN).  

To the On-Net caller - a Virtual On-Net destination is completely transparent !!!  The dialing process is the same as for on-net to on-net.

For the Virtual On-Net callers that are calling an On-Net station, the process is a bit different.  They do not have the luxury of direct abbreviated dialing, since they are no directly connected to the VPN.  They must first gain entry to the VPN and get a dial tone.  The stations that are Virtual On-Net are indeed set up differently than true On-Net locations.  

In equal access areas - the Virtual On-Net callers that have dedicated access, gain access to the VPN network through the use of specially configured existing Feature Group D (FGD) cut-thru trunks provided by the Local Exchange Carriers (LECs) and the long-distance carrier that manages the VPN.  Cut thru access requires the user to dial the CIC (Carrier Inter-exchange Code), also called the cut thru code, for example, Sprint's CIC code "10-10-333#" to obtain a dial tone before entering the VPN directory number.  The actual code you need to dial can be shortened, if the switch is programmed to accept it that way - for example, 10-333#) .  

Virtual on-net service in non-equal access areas and switched access (such as a residential or pay phone) is handled by dialing a universal VPN access number (such as 1+800-877-XXXX) plus an Authorization Code.  To minimize the digits dialed by the virtual on-net user in a non-equal access area, an autodialer is provided to automatically dial the Universal Access Number and Authorization Code.

Detailed Description of an On-net to Virtual On-net Call

1. The on-net caller goes off-hook and receives dial tone from his PBX. The user may have to dial a single access digit such as 8 to indicate a VPN call is about to be placed to the PBX; if so, the caller receives a second dial tone from the PBX. The caller then dials the abbreviated digit Virtual On-net directory number.  We will use 7 digits for this example VPN.

2. The switch recognizes the call as being VPN, originated by the dedicated trunk group or access line assigned to the VPN on-net location. Connection is established with the switch and destination information passed from the PBX.

3. the user is identified by either the origination number of the station (AIOD) or the main PBX trunk group assignment in the switch. The AIOD or trunk group identification is used to generate the CDR (Call Detail Record) and to point to the VPN's STS (Serving Translation Scheme) within the switch to obtain assigned routing information and to access the switch database tables for class of service and restrictions, and override requirements.

4. The VPN Network switch translates the seven digit VPN number to a ten digit PSN (Public Switched Network) destination number used to advance the call in accordance with the class of service and restrictions designated for that AIOD, or the trunk group via a filed authorization code. SS7 is used between network switches to advance the call setup.

5. In the call completion, a terminating protocol is sent by the terminating switch to the LEC. The type of terminating protocol is governed by the LEC equipment.

6. The terminating LEC equipment rings the destination VPN Virtual On-net telephone.

7. The destination telephone is answered (goes off-hook) and the destination LEC notifies the destination switch that the call is connected. The originating switch updates the CDR and starts a timer for length of call for billing purposes.

8. When the conversation is concluded and one party hangs up, disconnect messages are propagated through the network. The originating switch writes the termination time into the CDR. The CDR is then delivered to the transport system for delivery to the carrier's billing system.

Enforcement of VPN Dialing

Statistics show that it is very difficult to get both On-Net and Virtual On-Net users to dial the abbreviated number (On-Net callers) ot the VPN prefix followed by the VPN number (Virtual On-Net callers), when they have standard PSTN 1+ dialing available to them !!   Enforcement of this has always been a problem, but it is necessary since it saves the company money, and makes use od the VPN which they are paying a monthly fee for.