The Ethernet, originally called the Alto Aloha network, was designed by the Xerox Palo Alto Reasearch Center in 1973 to provide communication for reasearch and development CP/M computers. When in 1976 Xerox started to develop the Ethernet as a 20Mbps product, the network prototype was called the Xerox Wire. In 1980, when the Digital, Intel and Xerox standard was published to make it a LAN standard at Mbps, Xerox Wire changed its name back to Ethernet. Ehternet become a commercial product in 1980 at 10 Mbps. The IEEE called its Ethernet 802.3 standard CSMA/CD (or carrier sense multiple access with collision detection). As the 802.3 standard evolved, it has acquired such name as Thicknet (IEEE 10Base-5), Thinnet or Cheapernet (10Base-2), Twisted Ethernet (10Base-T) and Fast Ethernet (100Base-T).

The design of Ehternet preceded the developement of the seven- layer OSI model. The Open System Interconnect (OSI) model was developed and published in 1982 by the Inernational Organisation for Standardisation (OSI) as generic model for data communication. The OSI model is useful because it is a broadly based document, widely available and often referenced. Since modularity of communication functions is a key design criterion in the OSI model, vendors who adhere to the standards and guidelines of this model can supply Ethernet-compatible devices, alternative Ethernet channels, higher-performance Ethernet networks and bridging protocols that easily and reliably connect other types of data network to Ethernet.

Since the OSI model was developed after Ethernet and Signaling System #7 (ss7), there are obviously some discrepancies between these three protocols. Yet the functions and processes outlined in the OSI model were already in practice when Ehternet or SS7 was developed. In fact, SS7 networks use point-to-point configurations between signalling points. Due to the point-to-point configurations and the nature of the transmissions, the simple data link layer does not require much complexity.

The OSI reference model specifies the seven layers of functionality. It defines the seven layers from the physical layer (which includes the network adapters), up to the application layer, where application programs can access network services. However, the OSI model does not define the protocols that implement the functions at each layer. The OSI model is still important for compatibility, protocol independence and the future growth of network technology. Implementations of the OSI model stipulate communication between layers on two processors and an interface for interlayer communication on one processor. Physical communication occures only at layer 1. All other layers communicate downward (or upward) to lower (or higher) levels in steps through protocol stacks.