A virtual circuit (VC) is a communications arrangement in which data from a source user may be passed to a destination user over more than one real circuit configuration during a single period of communication, but the switching is hidden from the users.

Switched virtual circuits are generally set up on a per-call basis and are disconnected when the call is terminated; however, a permanent virtual circuit can be established as an option to provide a dedicated link between two facilities.

A switched virtual circuit (SVC) is a virtual circuit that is dynamically established on demand and is torn down when transmission is complete. POTS and ISDN telephone calls on the PSTN can be regarded as a simple form of switched virtual circuit. SVCs are used in situations where data transmission is sporadic. Called a switched virtual connection in ATM terminology.

A permanent virtual circuit (PVC) is a virtual circuit established for repeated use between the same data terminal equipments (DTE). In a PVC, the long-term association is identical to the data transfer phase of a virtual call. Permanent virtual circuits eliminate the need for repeated call set-up and clearing.

See also: DLCI