A virtual circuit (VC) is a means of transporting data over a data network, based on packet switching and in which a connection is first established across the network between two endpoints. The network, rather than having a fixed data rate reservation per connection as in circuit switching, takes advantage of the statistical multiplexing on its transmission links, an intrinsic feature of packet switching.
A 1978 standardization of virtual circuits by the CCITT imposes per-connection flow controls at all user-to-network and network-to-network interfaces. This permits participation in congestion control and reduces the likelihood of packet loss in a heavily loaded network. Some circuit protocols provide reliable communication service through the use of data retransmissions invoked by error detection and automatic repeat request (ARQ).