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The H.323 standard specifies the components, protocols, and procedures for the transmission of real-time audio, video, and data communications over IP (packet-based) networks.
Point to point video conferencing: In its simplest form H.323 video conferencing consists of two H.323 video conferencing systems talking to each other over the Internet. This is called "point to point" conferencing. One station initiates the call, and the other either accepts or rejects it. Once accepted, encoded and compressed audio and video flow between the two stations.
Multipoint video conferencing: The last major piece in the puzzle was to provide a means for multipoint video conferencing, i.e., more than two sites. In the H.320/ISDN world, a Multipoint Control Unit (MCU) was used. This allowed three or more user stations to connect to the MCU. In a "voice switching" mode, the MCU made a decision about which site was currently talking (or talking the loudest). The MCU then transmitted the audio and video stream for the selected terminal back to all other terminals. As users at a different terminal started to talk, that terminal’s audio and video signals were sent to all other terminals.
The H.323 world adopted this same method of providing multipoint operation. H.323 MCU's are far less expensive. They require only a single network connection rather than multiple ISDN lines.
There are four components to H.323:
Terminal/Endpoint/Conferencing System/Codec: A basic video conference system has a camera and a microphone. Video from the camera and audio from the microphone is converted into a digital format and transmitted to a receiving location using a coding and decoding device, often referred to as a "codec".
Multipoint Control Unit (MCUs): Supports conferences between three or more endpoints
Gateway: An optional element, gateways provide translation functions between H.323 conferencing codecs and other conferencing terminals, i.e., H.320.
Gatekeeper: Performs two call control functions - address translation from aliases to IP addresses and bandwidth management. The collection of all terminals, gateways, and MCUs are managed by a single gatekeeper is called an H.323 Zone.