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Some electrical interfaces, such as ethernet, specify that the outward-facing socket are to be isolated by a transformer. For instance, see this circuit example from the data sheet of an ethernet controller: Ethernet circuit with transformers

Ostensibly, these transformers are there to "protect" the circuit from external high-voltage transients, such as lightning strikes. I couldn't imagine how transformers might help, so I simulated it, using this circuit (SW4 closes at 200 ms, "starting" the lightning strike and SW6 closes 50 ms later, ending the strike): Simulation circuit

Below are the simulation results (click for larger image): Results (small)

As you can see, the surge is let right through, and the transformer doesn't help at all! So what am I missing? How can a transformer protect against high voltage surges from the outside?

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    \$\begingroup\$ One big problem with your simulation is that you injected differential mode noise. This type of ethernet is twisted pair, so most noise that the wire picks up will be common mode, which the transformer will greatly attenuate. \$\endgroup\$ – Olin Lathrop Nov 19 '14 at 21:22
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So what am I missing? How can a transformer protect against high voltage surges from the outside?

That is not how lightning generally inflicts itself on telecom cables (for instance). Typically, both conductors are balanced impedance wise to ground and lightning therefore raises both conductors up in potential together. The net voltage across the two wires is small enough to be regarded as harmless given the normal protection methods empoyed on telephone lines.

Because both conductors generally ride to some large potatnial together, the transformer blocks this voltage providing the voltage is not high enough to breakdown primary-secondary insulation. If it does then the brown stuff hits the fan and your modem/interface is dead!

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They're for galvanic isolation. This means that the grounds of all the PCs on an ethernet (say) are not connected together by the ethernet cables. If they were, it would be a violation of electrical code (in some jusidictions). Given a big enough network, there's no guarantee that the mains earth (ground) will be at the same potential everywhere. Small voltage differences may exist, and given that this is mains wiring, large currents are available.

Adding the isolation transformers means that the PCs/network devices are connected to ground solely via their mains earth wires, not via the network cables. MIDI uses optoisolators for a similar reason.

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