lex integrated circuits are replacing many lower scale integrated circuits. This decreases system costs, because the increased com- plexity of components does not cost much in volume. When integrated cir- cuits are manufactured in volume, complex ones do not cost much more than less complex circuits. In addition, the smaller number of separate com- ponents gives better reliability. In long-distance connections, we have to amplify or regenerate the sig- nal on the line many times. When we amplify an analog signal on the line, we amplify noise at the same time. This added noise decreases the quality of an analog signal, that is, decreases the signal-to-noise (S/N) ratio. In the case of a digital system we use regenerators or repeaters instead of amplifiers. Repeaters regenerate the signal symbol by symbol, that is, trans- mit further the value that is closest to the received value. The regenerated sig- nal is a sequence of digital symbols with nominal values and thus it contains no noise. If the noise is low in the input of each regenerator, symbols of the digital signal are regenerated without errors and we receive exactly the same digital message on the other side of the world as it was at the transmitting end. The operation of a digital repeater or regenerator is described in Chapter 4. Modern switches digitize speech in the subscriber interface. If the path through the network is fully digital, conversion back to analog is done only at the far end. There is only one analog-to-digital and one digital-to-analog conversion regardless of the communication distance, that is, whether we make a call to our neighbor or to other side of the world. The digital systems have to identify only signals from a set of discrete values. If symbols are not mixed because of too high a noise level, noise does not have any impact on the operation. Analog communication usually requires a much better S/N than low error rate digital communication. As a consequence, digital systems can utilize channels with much higher noise lev- els and