An ISPBX is a specific example of an NT2 (see Reference Points). User - network layer three message handling has a similar significance for TE to TE connections as for TE to NT2 (or ISPBX) connections. The ISPBX can provide support for layers 1, 2 and 3 and will communicate, therefore, with the TE on a peer to peer basis with layer three messages. The Layer 2 protocol - LAPD - carries layer 3 messages between peers.

As a layer three entity, the ISPBX supports all layer three functions. The D channel of the TE communicates with layer 3 of the NT2. While waiting for a call from the originating TE, the ISPBX is in the 'listen' state. The TE to ISPBX peer to peer layer three communication is implemented in a similar way to the layer three communication between the TE and the ET in the local exchange.

When it receives a Setup message from the TE it will, on the basis of bearer compatibility and an examination of Calling Line ID, decide to accept or reject the call. If it accepts it then it will set about routing the call to its destination

Addressing Schemes used in the Calling Number IE will cater for the case of the PABX where a prefix is generally needed to access an outside line.