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FINANCIAL NETWORKS
NETWORK LAYERS & PROTOCOLS
1. OSI Reference Model.........................................................................................................2
1.1 Application Layer.....................................................................................................3
1.2 Presentation Layer.......................................................................................................3
1.3 Session Layer.............................................................................................................4
1.4 Transport Layer.............................................................................................................4
1.5 Network Layer...............................................................................................................4
1.6 Data Link Layer.............................................................................................................4
1.7 Physical Layer................................................................................................................5
1.8 Protocol Comparison...................................................................................................5
2. Data Link/LAN Protocols..................................................................................................5
2.1 LAN Media-Access Methods.....................................................................................6
2.1.1 CSMA/CD – Carrier Sense Multiple Access with Collision
Detection..............................................................................................................................6
2.1.2 Token Ring...............................................................................................................6
2.1.3 Partition Channel..................................................................................................7
2.2 LAN Transmission Methods.....................................................................................7
2.2.1 Unicast Transmission..........................................................................................7
2.2.2 Multicast Transmission......................................................................................8
2.2.3 BroadcastTransmission......................................................................................8
2.3 LAN Devices....................................................................................................................8
2.3.1 Repeater...................................................................................................................8
2.3.2 Hub.............................................................................................................................8
2.3.3 LAN Extender.........................................................................................................8
2.4 Wireless LAN..................................................................................................................9
2.5.1 Wireless LAN Protocols......................................................................................9
3.1 TCP/IP Protocol Stack...............................................................................................11
3.1.2 Transport layer:.......................................................................................................11
3.1.3 Internetwork layer..............................................................................................12
3.1.4 Network interface layer...................................................................................12
3.2 TCP/IP Architecture Diagram................................................................................12

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Objectives:
This session deals with Network Protocols - at another important
component of computer networks. The major LAN protocol differentiator ie
Media Access methods are described and then the session goes on to LAN
devices. From the standards OSI reference model to TCP/IP model it
discusses all major network protocols.
At the end of the session you will know
1. Why network protocols
2. Why different media access methods
3. Different LAN devices
4. TCP/IP – an Internetworking Protocol

NETWORK LAYERS & PROTOCOLS

The overall process of enabling two computers talk to each other is

extremely complex. You have to deal with different types of computer
systems like UNIX, Macintosh, DOS, Windows; different kinds of media like
Cables, satellite, radio, fiber etc; different bit representations like (Motorola
chips) big-endian, little-endian(Intel chips) etc. So the whole task of
communication has been divided into sets of subtasks that can be grouped
coherently and can function independently. This grouping of communication
functions into related and manageable sets is called layered approach for
computer networks and the layers are called protocols.

1. OSI Reference Model

Modern computer networks are designed in a highly structured way. To
reduce their design complexity, most networks are organized as a series of
layers, each one built upon its predecessor. The OSI Reference Model is
based on a proposal developed by the International Organization for
Standardization (ISO). The model is called ISO OSI (Open Systems
Interconnection) Reference Model because it deals with connecting open
systems - that is, systems that are open for communication with other
systems.

The OSI model has seven layers. The principles that were applied to arrive
at the seven layers are as follows:
1. A layer should be created where a different level of abstraction is
needed. (Ex: When you browse Internet, you just need how to type
URL in the Address Bar of IE. You just not bothered about, how this
address flows and reaches the right computer. You don’t even know

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where exactly the computer is placed. Abstraction is something that

precisely cuts of in depth details)
2. Each layer should perform a well-defined function.
3. The function of each layer should be chosen with an eye toward
defining internationally standardized protocols.
4. The layer boundaries should be chosen to minimize the interaction
across the interfaces.

Seven layers of OSI are defined as follows:

7) Application: Provides different services to the users like E-Mail, Web
Browsing, Chat, File Transfer
6) Presentation: Converts the information into NDR – Network Data
Representation that every network component can understand
5) Session: Handles problems, which are not communication issues but
rather application oriented like keeping track of the user, how much data is
transferred etc
4) Transport: Provides end-to-end communication control irrespective of
how many routers the data has to cross and over different media
3) Network: Routes the information in the network across routers
2) Data Link: Provides error control (signal loss) between adjacent nodes
1) Physical: Connects the entity to the transmission media

1.1 Application Layer

The application layer contains a variety of protocols that are commonly
needed. For ex: file transfer protocol is one such application layer protocol.
Different file systems have different file naming conventions, different ways
of representing text lines, and so on. Transferring a file between two
different systems requires handling these and other incompatibilities. This
work, too, belongs to the application layer, as do electronic mail, remote job

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entry, directory lookup, and various other general-purpose and special-

purpose facilities.

1.2 Presentation Layer

Unlike all the lower layers, which are just interested in moving bits reliably
from here to there, the presentation layer is concerned with the syntax and
semantics of the information transmitted.

A typical example of a presentation service is encoding data in a standard,

agreed upon way. Users exchange things such as people's names, dates,
amounts of money, and invoices. These items are represented as character
strings, integers, floating point numbers etc in computers. Different
computers have different codes for representing character strings, integers
and so on. In order to make it possible for computers with different
representation to communicate, an abstract representation, NDR – Network
Data Representation was agreed upon by all computers. The job of
managing this abstract data and converting from the representation used
inside the computer to the network standard representation is handled by
the presentation layer.

The presentation layer is also concerned with other aspects of information

representation. For example, data compression can be used here to reduce
the number of bits that have to be transmitted and cryptography is
frequently required for privacy and authentication.

1.3 Session Layer

The session layer allows users on different machines to establish sessions or
dialogues between them. Another session service is synchronization.
Consider the problems that might occur when trying to do a two-hour file
transfer between two machines on a network with a 1-hour mean time
between crashes. After each transfer was aborted, the whole transfer would
have to start over again, and would probably fail again with the next
network crash. To eliminate this problem, the session layer provides a way
to insert checkpoints into the data stream, so that after a crash, only the
data after the last checkpoint has to be repeated.

1.4 Transport Layer

The basic function of the transport layer is to accept data from the session
layer, split it up into smaller units if need be, pass these to the network
layer, and ensure that the pieces all arrive correctly at the other end.
Furthermore, all this must be done efficiently, and in a way that isolates the
session layer from the inevitable changes in the hardware technology like
new media.

Many hosts are multi-programmed, which implies that multiple connections

will be entering and leaving each host. There needs to be some way to tell
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which message belongs to which connection. The transport header is one

place this information could be put.

There must also be a mechanism to regulate the flow of information, so that

a fast host cannot overrun a slow one.

1.5 Network Layer

While a packet is traveling from one network to another on its way to reach its destination, many
problems can arise. The addressing used by the second network may be different from the first
one. The second one may not accept the packet at all because it is too large. The underlying data
link protocols may differ, and so on. It is up to the network layer to overcome all these problems
to allow heterogeneous networks to be interconnected.

1.6 Data Link Layer

The main task of the data link layer is to take a raw transmission facility and
make it meaningful communication. It accomplishes this task by having the
sender break the input data up into data frames (typically a few hundred
bytes), transmit the frames sequentially, and process the acknowledgment
frames sent back by the receiver. Since the physical layer merely accepts
and transmits a stream of bits without any regard to meaning of structure,
it is up to the data link layer to create and recognize frame boundaries.

A noise burst on the line can destroy a frame completely. In this case, the
data link layer software on the source machine must retransmit the frame.
However, multiple transmissions of the same frame introduce the possibility
of duplicate frames. A duplicate frame could be sent, for example, if the
acknowledgment frame from the receiver back to the sender was destroyed.
It is up to this layer to solve the problems caused by damaged and duplicate
frames.

Another issue that arises in the data link layer (and most of the higher
layers as well) is how to keep a fast transmitter from drowning a slow
receiver in data. Some traffic regulation mechanism must be employed in
order to let the transmitter know how much buffer space the receiver has at
the moment. Frequently, flow regulation and error handling are integrated,
for convenience.

1.7 Physical Layer

The physical later is concerned with transmitting raw bits over a
communication channel. The design issues have to do with making sure that
when one side sends a 1 bit, it is received by the other side as a 1 bit, not as
a 0 bit. Typical questions here are how many volts should be used to
represent a 1 and how many for a 0, how many microseconds a bit lasts,
whether transmission may proceed simultaneously in both directions, how
the initial connection is established and how it is torn down when both sides
are finished, and how many pins the network connector has and what each
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pin is used for. The design issues here deal largely with mechanical,
electrical, and procedural interfaces, and the physical transmission medium,
which lies below the physical layer. Physical layer design can properly be
considered to be within the domain of the electrical engineer.

1.8 Protocol Comparison

Following table gives a bird view of network protocols developed by different vendors,
following OSI model. Out of all these protocols, TCP/IP has become the de-facto standard.

Apple Microsoft OSI

OSI Banyan DEC IBM Novell TCP/IP Xerox
Comput Networki Protoc
Layer Systems DECnet SNA NetWare Internet XNS
er ng ols

Applicati
Application Programs and Protocols
on
for file transfer, electronic mail, etc.
Layer 7

Transacti
AppleTal Network
on Server NetWare
Presenta k Managemen
Services Message Core ISO
tion Filing t
Presentati Block Protocols 8823
Layer 6 Protocol Network
on (SMB) (NCP Control
(AFP) Remote Application
Services and
Procedural (Telnet, FTP,
Process
Calls SMTP, etc.)
Network Network Interact
AppleTal (Net RPC)
Basic Basic ion
k Data
Session Input/Out Input/Out ISO
Session Session Flow
Layer 5 put put 8327
Protocol Control
System System
(ASP)
(NetBIOS) (NetBIOS)

Transmissio
n
AppleTal Control
VINES Sequence Sequen
k Protocol
Transpor InterProcess End Transmiss d ced ISO
Transact (TCP),
t Communicat Communicat ion Packet Packet 8073
ion Network Unacknowle
Layer 4 ions ions Control Exchange Protocol TP0-4
Protocol Basic dged
(VIPC) (SPX) (SPP)
(ATP) Extended Datagram
User Protocol
Interface (UDP)
(NetBEUI)
Datagra Internet
VINES Internet
m Internet Datagra ISO
Network Internet Path Packet
Delivery Routing Protocol m 8473
Layer 3 Protocol Control Exchange
Protocol (IP) Protocol (CLNP)
(VIP) (IPX)
(DDP) (IDP)

Data
Network Interface Cards: Ethernet, Token-Ring, ARCNET, StarLAN, LocalTalk, FDDI, ATM, etc.
Link
NIC Drivers: Open Datalink Interface (ODI), Network Independent Interface Specification (NDIS)
Layer 2

Physical Transmission Media:

Layer 1 Twisted Pair, Coax, Fiber Optic, Wireless Media, etc.

2. Data Link/LAN Protocols

In the above table, the first 2 layers are common across all sets of vendor protocols. This is
because, the physical and data link layer protocols are tightly integrated and these are the
protocols that give access to the communication media. These protocols are called LAN
protocols. In this section, we see these protocols in detail.
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2.1 LAN Media-Access Methods

There are two situations for the nodes/devices connected to a data link layer
 Two nodes are connected to it, so the link provides a point to point
connection
 Many nodes are connected to it, and they might interfere with each
other—this requires a multiple access protocol
Media contention occurs when two or more network devices have data to
send at the same time. Because multiple devices cannot talk on the network
simultaneously, some type of method must be used to allow one device
access to the network media at a time. This is done in three main ways:
 Allow collisions
 Take turns
 Partition the channel

2.1.1 CSMA/CD – Carrier Sense Multiple Access with Collision

Detection
In networks using CSMA/CD technology such as Ethernet, network devices
contend for the network media. When a device has data to send, it first
listens to see if any other device is currently using the network. If not, it
starts sending its data. After finishing its transmission, it listens again to
see if a collision occurred. A collision occurs when two devices send data
simultaneously. When a collision happens, each device waits a random
length of time before resending its data. In most cases, a collision will not
occur again between the two devices. Because of this type of network
contention, the busier a network becomes, the more collisions occur. This is
why performance of Ethernet degrades rapidly as the number of devices on
a single network increases.

2.1.2 Token Ring

In token-passing networks such as Token Ring and FDDI, a special network
packet called a token is passed around the network from device to device.
When a device has data to send, it must wait until it has the token and then
sends its data. When the data transmission is complete, the token is
released so that other devices may use the network media. The main
advantage of token-passing networks is that they are deterministic. In other
words, it is easy to calculate the maximum time that will pass before a
device has the opportunity to send data. This explains the popularity of
token-passing networks in some real-time environments such as factories,
where machinery must be capable of communicating at a determinable
interval.

Normally CSMA/CD networks are half-duplex, meaning that while a device

sends information, it cannot receive at the time. While that device is talking,
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it is incapable of also listening for other traffic. This is much like a walkie-
talkie. When one person wants to talk, he presses the transmit button and
begins speaking. While he is talking, no one else on the same frequency can
talk. When the sending person is finished, he releases the transmit button
and the frequency is available to others.

When switches are introduced, full-duplex operation is possible. Full-duplex

works much like a telephone—you can listen as well as talk at the same
time. When a network device is attached directly to the port of a network
switch, the two devices may be capable of operating in full-duplex mode. In
full-duplex mode, performance can be increased, but
not quite as much as some like to claim. A 100-Mbps Ethernet segment is
capable of transmitting 200 Mbps of data, but only 100 Mbps can travel in
one direction at a time. Because most data connections are asymmetric
(with more data traveling in one direction than the other), the gain is not as
great as many claim. However, full-duplex operation does increase the
throughput of most applications because the network media is no longer
shared. Two devices on a full-duplex connection can send data as soon as it
is ready.

Token-passing networks such as Token Ring can also benefit from network
switches. In large networks, the delay between turns to transmit may be
significant because the token is passed around the network.

2.1.3 Partition Channel

The capacity of the link to carry information is measured in bits per second
and is called as Bandwidth. In this method each of the nodes is allotted a
part of the bandwidth.
 This means they can all communicate at almost the same time
 But nobody can send data at full bandwidth of the underlying channel
hardware

2.1.3.1 Frequency Division Multiple Access

This is a protocol method for partitioning the channel using analogue
frequency bands. The following figure shows that individual nodes are
assigned fixed frequency for infinite time, irrespective of they send/receive
data. Although technically simple to implement, FDMA is wasteful of bandwidth.

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FDMA TDMA

2.1.3.2 Time Division Multiple Access

In this protocol, the channel is partitioned using time slices. Whenever a
node has its time slice, it can transmit at full speed, and it gets a time slice
at regular intervals. Works well for bursty traffic, but not for continuous
stream traffic. In figure TDMA, each frequency is again allotted for different
nodes at different intervals of time.

2.2 LAN Transmission Methods

LAN data transmissions fall into three classifications: unicast, multicast,
and broadcast.
In each type of transmission, a single packet is sent to one or more nodes.

2.2.1 Unicast Transmission

In a unicast transmission, a single packet is sent from the source to a
destination on a network. First, the source node addresses the packet by
using the address of the destination node. The package is then sent onto the
network, and finally, the network passes the packet to its destination.

2.2.2 Multicast Transmission

A multicast transmission consists of a single data packet that is copied and
sent to a specific subset of nodes on the network. First, the source node
addresses the packet by using a multicast address. The packet is then sent
into the network, which makes copies of the packet and sends a copy to
each node that is part of the multicast address.

2.2.3 BroadcastTransmission
A broadcast transmission consists of a single data packet that is copied and
sent to all nodes on the network. In these types of transmissions, the source
node addresses the packet by using the broadcast address. The packet is
then sent on to the network, which makes copies of the packet and sends a
copy to every node on the network.

2.3 LAN Devices

Devices commonly used in LANs include repeaters, hubs, LAN extenders,
bridges, LAN switches, and routers.
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2.3.1 Repeater
A repeater is a physical layer device used to interconnect the media
segments of an extended network. A repeater essentially enables a series of
cable segments to be treated as a single cable. Repeaters receive signals
from one network segment and amplify, retime, and retransmit those signals
to another network segment. These actions prevent signal deterioration
caused by long cable lengths and large numbers of connected devices.
Repeaters are incapable of performing complex filtering and other traffic
processing. In addition, all electrical signals, including electrical
disturbances and other errors, are repeated and amplified.

2.3.2 Hub
A hub is a physical layer device that connects multiple user stations, each via a dedicated cable.
Electrical interconnections are established inside the hub. Hubs are used to create a physical star
network while maintaining the logical bus or ring configuration of the LAN. In some respects, a
hub functions as a multiport repeater.

2.3.3 LAN Extender

A LAN extender is a remote-access multilayer switch that connects to a host
router. LAN extenders forward traffic from all the standard network layer
protocols (such as IP, IPX, and AppleTalk) and filter traffic based on the
MAC address or network layer protocol type. LAN extenders scale well
because the host router filters out unwanted broadcasts and multicasts.
However, LAN extenders are not capable of segmenting traffic or creating
security firewalls.

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2.4 Wireless LAN

“Wireless" means transmitting signals over invisible radio waves instead of
wires. Garage door openers and television remote controls were the first
wireless devices to become a part of everyday life. Now the cordless
keyboard and mouse, PDAs, and digital and cellular phones are
commonplace.
Wireless data is predominately transferred over two kinds of
networks: wide area networks (WANs) and local area networks (LANs).
These networks are similar to their wired counterparts—they just use radio
waves instead of copper or fiber.
Wireless LANs, already popular in airports and hotels, are often used
to replace or enhance wired LANs. They can cover a range of 500 feet
indoors and up to 1,000 feet outdoors. They may service a smaller area than
their WAN cousins, but LANs can transfer data much faster, at speeds up to
11Mbps. Wireless LANs are used primarily for data; they do not usually
support voice traffic.
Wireless LAN technologies predominantly use the 802.11 family of
specifications, despite evidence of some security problems.

2.5.1 Wireless LAN Protocols

Technology Family Protocol Group Protocol

Wireless / Mobility Wireless, Fixed OFDM
Point-to-Multi-point
Point-to-point
VOFDM
Wireless / Mobility Wireless, LAN (WLAN) WLAN Security
WLAN Transmission
Wireless / Mobility Wireless, Mobile CDMA
IP RAN Transport
PDSN
TDMA
WAP

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Bluetooth:
Essentially Bluetooth is the term used to describe the protocol of a short range (10 meter)
frequency-hopping radio link between devices. These devices are then termed Bluetooth -
enabled.
3. Internetworking Protocol – TCP/IP
Today, the Internet and World Wide Web (WWW) are familiar terms to
millions of people all over the world. Many people depend on applications
enabled by the Internet, such as electronic mail and Web access. In
addition, the increase in popularity of business applications places
additional emphasis on the Internet. The Transmission Control
Protocol/Internet Protocol (TCP/IP) protocol suite is the engine for the
Internet and networks worldwide. Its simplicity and power has lead to its
becoming the single network protocol of choice in the world today. The
TCP/IP protocol suite is so named for two of its most important protocols:
Transmission Control Protocol (TCP) and Internet Protocol (IP). A less used
name for it is the Internet Protocol Suite, which is the phrase used in official
Internet standards documents.

The main design goal of TCP/IP was to build an interconnection of networks,

referred to as an Internetwork, or Internet, that provided universal
communication services over heterogeneous physical networks. The clear
benefit of such an internetwork is the enabling of communication between
hosts on different networks, perhaps separated by a large geographical
area.

In most cases, networks are limited in size by the number of users that can
belong to the network, by the maximum geographical distance that the
network can span, or by the applicability of the network to certain
environments. For example, an Ethernet network is inherently limited in
terms of geographical size. Hence, the ability to interconnect a large
number of networks in some hierarchical and organized fashion enables the
communication of any two hosts belonging to this internetwork.

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Another important aspect of TCP/IP internetworking is the creation of a

standardized abstraction of the communication mechanisms provided by
each type of network. Each physical network has its own technology-
dependent communication interface, in the form of a programming interface
that provides basic communication functions (primitives). TCP/IP provides
communication services that run between the programming interface of a
physical network and user applications. It enables a common interface for
these applications, independent of the underlying physical network. The
architecture of the physical network is therefore hidden from the user and
from the developer of the application. The application need only code to the
standardized communication abstraction to be able to function under any
type of physical network and operating platform.

3.1 TCP/IP Protocol Stack

Like most networking software, TCP/IP is modeled in layers. This layered
representation leads to the term protocol stack, which refers to the stack of
layers in the protocol suite. It can be used for positioning (but not for
functionally comparing) the TCP/IP protocol suite against others, such as
Systems Network Architecture (SNA) and the Open System Interconnection
(OSI) model. Functional comparisons cannot easily be extracted from this,
as there are basic differences in the layered models used by the different
protocol suites.

By dividing the communication software into layers, the protocol stack

allows for division of labor, ease of implementation and code testing, and
the ability to develop alternative layer implementations. Layers
communicate with those above and below via concise interfaces. In this
regard, a layer provides a service for the layer directly above it and makes
use of services provided by the layer directly below it. For example, the IP
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layer provides the ability to transfer data from one host to another without
any guarantee to reliable delivery or duplicate suppression. Transport
protocols such as TCP make use of this service to provide applications with
reliable, in-order, data stream delivery. The TCP/IP protocols are modeled in
four layers.

These layers include:

3.1.1 Application layer:
The program that uses TCP/IP for communication provides the application
layer. An application is a user process cooperating with another process
usually on a different host (there is also a benefit to application
communication within a single host). Examples of applications include
Telnet and the File Transfer Protocol (FTP). Port numbers and sockets bind
the application to transport layers. So each application can also be
identified with well-known port numbers like 21 for FTP, 23 for Telenet and
80 for HTTP etc

3.1.2 Transport layer:

The transport layer provides the end-to-end data transfer by delivering data
from an application to its remote peer. Multiple applications can be
supported simultaneously. The most-used transport layer protocol is the
Transmission Control Protocol (TCP), which provides connection-oriented
reliable data delivery, duplicate data suppression, congestion control, and
flow control. Another transport layer protocol is the User Datagram
Protocol It provides connectionless, unreliable, best-effort service. As a
result, applications using UDP as the transport protocol have to provide
their own end-to-end integrity, flow control, and congestion control, if it is
so desired. Usually, UDP is used by applications that need a fast transport
mechanism and can tolerate the loss of some data.

3.1.3 Internetwork layer

The internetwork layer, also called the internet layer or the network layer,
provides the "virtual network" image of an internet (this layer shields the
higher levels from the physical network architecture below it). Internet
Protocol (IP) is the most important protocol in this layer. It is a
connectionless protocol that doesn't assume reliability from lower layers. IP
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does not provide reliability, flow control, or error recovery. These functions
must be provided at a higher level. IP provides a routing function that
attempts to deliver transmitted messages to their destination. A message
unit in an IP network is called an IP datagram. This is the basic unit of
information transmitted across TCP/IP networks. Other internetwork layer
protocols are IP – Internet Protocol, ICMP – Internet Control Message
Protocols, IGMP – Internet Group Message Protocol, ARP – Address
Resolution Protocol and RARP – Reverse Address Resolution Protocol.

3.1.4 Network interface layer

The network interface layer, also called the link layer or the data-link layer,
is the interface to the actual network hardware. This interface may or may
not provide reliable delivery, and may be packet or stream oriented. In fact,
TCP/IP does not specify any protocol here, but can use almost any network
interface available, which illustrates the flexibility of the IP layer. Examples
are IEEE 802.2 Ethernet LAN, X.25 (which is reliable in itself), FDDI and
even SNA.

3.2 TCP/IP Architecture Diagram

Review Questions:
1. On your computer, check the network configuration
a. List the protocols its showing
b. Check the properties of TCP/IP protocol
c. List the information that TCP/IP protocol is showing or expecting to be input

2. What’s the make of Network Interface Card of your computer?

3. Type ‘ipconfig /all’ command on your computer command prompt and note down the
result
4. Type ‘netstat –a’ at command prompt and note down the result

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