al network is based on pulse code modulation (PCM). The general design of a PCM system was invented by Reeve in 1937, an ITT engineer from Standard Telephone Laboratories (STL), while visiting a French ITT subsidiary. It did not become a reality until Shockley's (Bell Telephone Laboratories) invention of the transistor. Field trials of PCM systems were evident as early as 1952 in North America. PCM is a form of time division multiplex. It has revolutionized telecommunications. Even our super-high-fidelity compact disc (CD) is based on PCM. 6.1.1 Two Different PCM Standards As we progress through this chapter, we must keep in mind that there are two quite different PCM standards. On one hand there is a North American standard which some call T1, and we prefer the term DS1 PCM hierarchy. The other standard is the E1 hierarchy, which we sometimes refer to as the "European" system. Prior to about 1988, E1 was called CEPT30+2, where CEPT stood for Conference European Post and Telegraph (from the French). Japan has sort of a hybrid system. We do not have to travel far from the United States to encounter the E1 hierarchy, just south of the Rio Grande (Mexico). 6.2 BASIS OF PULSE CODE MODULATION Let's see how we can develop an equivalent PCM signal from an analog signal, typified by human speech. Our analog system model will be a simple tone, say 1200 Hz, which we represent by a sine wave. There are three steps in the development of a PCM signal from that analog model: 1. Sampling 2. Quantization 3. Coding 6.2.1 Sampling The cornerstone of an explanation of how PCM works is the Nyquist sampling theorem (Ref. 1), which states: If a band-limited signal is sampled at regular intervals of time and at a rate equal to or higher than twice the highest significant signal frequency, then the sample contains all the information of the original signal. The original signal may then be reconstructed by use of a low-pass filter. Consider some examples of the Nyquist sampling theorem from which we derive the sampling rate. 1. The nomin