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A CSU/DSU (Channel Service Unit/Data Service Unit) is a digital-interface device used to connect a Data Terminal Equipment device or DTE, such as a router, to a digital circuit, such as a T1 line. The CSU/DSU implements two different functions. The CSU is responsible for the connection to the telecom network while the DSU is responsible for handling the interface with the DTE. A CSU/DSU is the equivalent of the modem for an entire LAN. 
A CSU/DSU (Channel Service Unit/Data Service Unit) is a hardware device about the size of an external modem that converts digital data frames from the communications technology used on a local area network (LAN) into frames appropriate to a wide-area network (WAN) and vice versa. For example, if you have a Web business from your own home and have leased a digital line (perhaps a T-1 or fractional T-1 line) to a phone company or a gateway at an Internet service provider, you have a CSU/DSU at your end and the phone company or gateway host has a CSU/DSU at its end. The Channel Service Unit (CSU) receives and transmits signals from and to the WAN line and provides a barrier for electrical interference from either side of the unit. The CSU can also echo loopback signals from the phone company for testing purposes. The Data Service Unit (DSU) manages line control, and converts input and output between RS-232C, RS-449, or V.35 frames from the LAN and the time-division multiplexed (TDM) DSX frames on the T-1 line. The DSU manages timing errors and signal regeneration. The DSU provides a modem-like interface between the computer as Data Terminal Equipment (DTE) and the CSU. A CSU/DSU (Channel Service Unit/Data Service Unit) is a digital-interface device used to connect a Data Terminal Equipment device or DTE, such as a router, to a digital circuit (for example a T1 or T3 line). A CSU/DSU operates at the physical layer (layer 1) of the OSI model. CSU/DSUs are also made as separate physical products; CSUs and DSUs. The DSU or both functions may be included as part of an interface card inserted into a DTE. If the CSU/DSU is external, the DTE interface is usually compatible with the V.xx or RS-232C or similar serial interface.
The WIC (WAN Interface Card) may contain an integrated CSU/DSU that can be inserted into a router slot. An example of a WIC is the 1-port 56/64-kbit/s DSU/CSU WIC (WIC-1DSU-56K4) from Cisco Systems.
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