Abstract The paper describes a mathematical model for use in the initial planning of communication networks involving a number of terminals connected through multiplexers to a central computer. The model makes use of the two-thirds power relationship between multiplexer and terminal density to minimise cable distance to assess the total network cost including that caused by loss of availability. The total cost is given for both a star and a multiplexer network with and without the use of standby lines and the number of multiplexers is derived which minimises the total network cost. Included in the model is a method of assessing the total cost of a multiplexer network when the terminal density varies discretely throughout the computer service area. Finally, as an example of the model's application we derive the total cost of the different networks for the special case when the terminal density varies continuously throughout.