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Local vs. long-distance T1 circuits

We will soon be deploying an IP telephony solution for a small company, which includes a voice gateway router w/ PSTN access.  The PSTN connectivity will be provided by a T1 circuit, which has yet to be ordered.  It's my understanding that a single T1 circuit will provide this company both local and long-distance (LD) PSTN connectivity.

We have other customers, I've noticed, that have multiple T1's, and they are broken down by type - "6 T1's, and 4 LD T1's", for instance.  I'm trying to understand the specific differences between the two, functionally.   My questions:

1) Is the difference really just a pricing decision, where local "regular" T1's provide free local calling and charge for LD, where an LD charges minimally for LD calls, and more for local?   (So, a large organization that is expecting a lot of concurrent LD incoming or outgoing calls would justify purchasing LD circuits?)

2) There really would never be an absolute requirement to purchase a LD T1, since a local T1 can provide LD service (just at a higher cost), correct?

3) I've read that LD T1 circuits do not provide dial tone.  Does this mean that only incoming calls can come in over a LD T1, and that all outgoing calls will always traverse a local T1?

Thanks, and any additional detail and supporting docs/links are always appreciated.
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1 Solution
Of course, customer requirements vary -- which accounts for the "more than one way to do things."
Pricing and call volume are the best reasons for the different ways.  If a client has significant LD call volume (usually including heavy 800 number traffic) then it is beneficial to have dedicated LD trunks.  LD only trunks usually are priced with a circuit cost plus the most favorable per minute rate for the LD traffic.  A dedicated LD T-1 does have "dial tone" but it is only for outbound LD traffic.  With many carriers, you can place local calls across the LD T1, but you pay the LD rate even for a local call.
Thus, a firm with substantial LD traffic would have dedicated T1 for inbound and outbound LD, but also would need local T1 circuits (or regular lines) for local calls.  In the old days, the LD carriers could not provide ISDN circuits like the local carriers could, so that was another difference.  If the customer wants directly dialed incoming calls, then a local T1 or ISDN-PRI will handle that - many LD carriers can provide multiple 800 numbers to route to DID extensions, but it is not common to order separate numbers for each staff like on DID service.
A local T1 that is the standard digital trunking was priced with a monthly circuit charge (like the LD T1) plus a monthly "per trunk" charge.  This made the monthly rate for local T1s much higher than an LD T1.  Such a T1 can carry outbound LD and inbound 800 service can be pointed to it as well.  With many carriers, an ISDN-PRI is one flat monthly rate -- although more costly than an LD T1, it is normally less expensive than the older digital T1 with the separate trunk charges.  For smaller companies with limited or moderate traffic, it is common to have one or two ISDN-PRI circuits carrying both local and LD traffic.  With good negotiating, you can often get LD rates in the same range as the dedicated T1, but it may depend on the carrier (if they are both an IXC - Interexchange Carrier - and a CLEC - Competitive Local Exchange Carrier).
Therefore, the example you provide - only one T1 circuit - obviously is appropriate for a smaller firm and the only task is to get the best LD rate you can.
Some even smaller firms will get a circuit that carries local and LD on part of the T1 and then used the balance of the bandwidth for Internet access or some other function.
cfan73Author Commented:
Thank you for the input!  A couple quick follow-up (hopefully simple) questions, and I'll award points:

Let's say a company has a local T1 and an LD T1, since they expect a lot of incoming LD/800-number received calls.   You mention that this LD T1 can also be used for outbound LD calls - if so, when placing such a call, what forces the call to go out over the LD circuit, as opposed to the local T1 circuit, which will end up charging much more per minute?

Secondly, are PRI lines absolutely required for incoming DID functionality, or can DID be handled somehow through other (local T1 or LD T1 circuits)?

Thanks again!

Every PBX / Hybrid / VoIP system has a feature that selects the appropriate trunk group based on rules.  This feature is usually called Least Cost Routing (LCR) or Automatic Route Selection (ARS).  The number dialed is compared to a table - non-local area codes and office codes within the local area code that are long distance are all routed to the LD T1.  If the number dialed is in the local number table, then it routes over the local trunks.  In some cases, the LCR/ARS route information will route overflow LD calls to the local trunks so that the users don't get a busy signal if the LD route is full, but then those calls will be charged the rate assigned to the local trunk group.  We have often be able to negotiate the same LD rate.
DID calls can be delivered over analog DID trunks (now the "old way" of doing things and rarely cost effective) or a standard local T1 configured to support DID calls.  Most carriers push ISDN because it is easier to support and delivers enhanced features such as inbound name and number caller ID.  A true LD T1 is not designed for local calls (in or out) and thus rarely supports DID type service.  In previous years there were tariffs that prevented it.  
Finally, SIP (Session Initiation Protocol) trunking is dial tone delivered over an Ethernet link and can be configured to support local service (including DID) and LD, with enhanced feature options.  As more VoIP systems are installed and more carriers support/push SIP it will become more popular than ISDN.
cfan73Author Commented:
Perfect - thank you!
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