Foreign exchange service (telecommunications)

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For the use of this term in finance, see Foreign exchange market.

Foreign exchange service (FX) is a telecommunications network service in which a telephone in a given exchange area is connected, via a private line (as opposed to a trunk line), to a telephone exchange or central office in another foreign exchange, rather than the local exchange area where the device is located.

To call originators, it appears that the called party having the FX service is located in the foreign exchange area.


In basic telephony there are two types of offices: local and foreign. A local office was assigned a specific area, and all telephone services provided to that area came from that central office. Each central office had its unique identifier. In the early days names were used, such as "Jackson" or "Newton". The office names were changed to three-digit numerical exchange codes (NNX), prefixed to the local phone number (not the area code).

Customers who wanted a telephone number provided by a neighbouring telephone central office leased a "foreign exchange" line. With the old two-wire loop technology, this would require an engineered circuit with increased costs. The practice, rare except in big cities, is in decline.

Foreign Central Office (FCO) or Foreign Zone (FZ) were, from a technological standpoint, deployed with the same methods as Foreign eXchange (FX). They differ only in that the remote office is in exactly the same rate centre (FCO) or merely in a different zone of the same US metropolitan city (FZ).[1] Much like FX service rates depend on the distance between rate centres, FCO service prices depend on the distance between exchanges.[2]


An FX line has the local calling area of the foreign exchange in which it is numbered.[3]

A subscriber located just outside the exchange boundary of a large city, or just outside the flat-rate local calling area for the city, would find that many numbers which would have been local from the city itself became long-distance. In many areas, local flat-rate service was subsidised by artificially-expensive long-distance toll service for much of the 20th century. As an "FX line" is a number from the neighbouring city, it has the full big-city calling area for both incoming and outbound calls.

For instance, a suburban business may want to market extensively to Toronto, a large city with flat-rate local calling:

  • If the business is in an adjacent suburb (such as Mississauga or Markham) a local number will reach the city but not the suburbs on the other side. Adding an FX line with a Toronto +1-416 number would provide full coverage.
  • If the business is located just outside the larger city's local calling area, an FX number in the next-closer suburb would provide a limited coverage of the city. An Oshawa business may lease an FX line from suburban Ajax as that community is local to both Toronto and Oshawa, even though Ajax does not have the full Toronto calling area.

The "FX line" is usually treated as part of the distant city when originating calls to N11-style numbers, such as information or emergency telephone numbers.

While a cost of hundreds of dollars monthly for the leased line was not uncommon, to a business handling large volumes of calls from the larger city the cost may have been justified by long-distance toll savings at a time when long-distance was pricey and alternatives were limited.

Originally, the FX line was a physical copper pair of telephone wires from the foreign exchange which were connected to the local subscriber loop at the local exchange, without passing through the local switch. This dedicated circuit is now often replaced with a virtual equivalent, where the local switch sends the FX calls to the foreign exchange (which handles all billing) on existing trunks.[4]

In rare instances, the supposed "foreign" exchange actually resided on the same physical telephone exchange at the same location, but clients were billed based on nominal centre-to-centre distance between different rate centres.[5]

A similar "FCO" service provided no difference in local calling area (the distant exchange is in the same rate centre). Historically, it was a means to obtain features not available on the local exchange (such as DTMF tone dialling when first introduced in 1963)[6] or keep an existing business telephone number operational after a cross-town move.

Conventional "foreign exchange" leased lines and their variants have become less common due to newer alternatives:

  • An outbound "extender" is an automated local number at a service bureau in the larger city. A suburban subscriber (who can call the city itself locally but is long distance to suburbs on the other side) could call the extender locally, get a city dial tone and dial back out locally to the larger area.
  • Remote call forwarding served a similar function for inbound calls only. A suburban business could get a downtown big-city number; clients anywhere in the larger city's coverage area could call locally, only to be silently redirected via a second local call to the destination.
  • Interactive voice response systems have been hosted at answering service bureaux for clients such as suburban radio stations accepting calls from listeners in the larger city. As the machine is on a city number, it is reachable from the full metropolitan calling area.
  • Mobile telephone exchanges (in countries which use geographic numbers) normally are issued from the larger city and have that city's full calling area.
  • Voice over IP numbers may be obtained from most cities and used almost anywhere in the world. VoIP renders the subscriber's physical location meaningless, as long as unrestricted broadband Internet is available at the site. Local number portability allows an existing number to be moved to VoIP (or, in some countries, a mobile telephone) which can then be freely moved out of the original geographic location while keeping the directory listing and service area unchanged.


Some terminology from the original "FX line" service is retained on voice over Internet equipment, such as "FXS" and "FXO" (foreign exchange station and foreign exchange office) to indicate whether VoIP equipment is designed for connection to telephones (stations) or telephone lines (office).

Foreign exchange office[edit]

In telecommunications, foreign exchange office (FXO) designates a telephone signaling interface that generates the off-hook and on-hook indications (loop closure/non-closure) at the Foreign exchange station's (FXS) end of a telephone circuit. Analog telephone handsets, fax machines and (analogue) modems are FXO devices, though the term is rarely used except in connection with foreign exchange service (FX).

FXO interfaces are also available for computers and networking equipment, to allow these to interact directly with POTS systems. These are commonly found in devices acting as gateways between local Voice over Internet Protocol (VoIP) systems and the public switched telephone network (PSTN).

In a nutshell, an FXO device is any device that, from the point of view of a telephone exchange, appears to be a regular telephone. As such, it should be able to accept ringing signals, go on-hook and off-hook, and send and receive voice frequency signals. It may use loop start or ground start signaling. FXO channel units were invented and named in the middle 20th century for service at the "Office" end of an FX line via carrier system.

Foreign exchange station[edit]

In telephony, a Foreign exchange station (FXS), is a telephone interface that supplies battery power, provides dial tone, and generates ringing voltage. A device that connects to such an interface contains a foreign exchange office (FXO) interface and could be a standard analog telephone or a private branch exchange (PBX) to receive telephone service.

Any telephone exchange is an example of an FXS, as is the telephone jack on the wall, though the term is rarely applied except in connection with foreign exchange service.

An FXS interface utilizes an FXO protocol to detect when the terminating device (telephone) goes on-hook or off-hook, and can send and receive voice signals.

An FXS interface provides service at the "station" end of a foreign exchange line.

See also[edit]


  1. ^
  2. ^ "Products & Services - Resale". AT&T Wholesale - Southeast Region. 
  3. ^
  4. ^
  5. ^ and on opposite sides of the Toronto-Mississauga boundary are examples where each exchange serves clients on both sides of a county line using different rate centres. A client in Mississauga requesting a Toronto number would be charged FX line rates, despite the Toronto numbers being on the same physical switch.
  6. ^ "Atlanta Telephone History". 

External links[edit]