A network interface device (NID), also called network interface unit (NIU), is an interface between the network provider's local loop and the customer. These are present as grey boxes outside customer's premises, where the data wires of the phone company or the network provider ends and the customer's wiring begins.
NID demarcates between provider's connection and customer's connection.
Maintenance of wiring of the local loop up to the NID is the responsibility of the phone provider, while maintenance of wiring from the NID to the customer premises is the responsibility of the customer.
NID protects the customer wirings and equipment from transient energy in the local loop line like lightning. It has a circuit protector to do so.
NID is used to test whether the connection is working properly or not. It has a test jack. If the test jack is not working, it implies that a fault is there in the line that is to be repaired by the service provider. If it works, then there is a fault in the customer wiring or equipment.
Traditionally, NID is a simple connecting device that doesn't have any intelligence or logic in it.
Some NIDs have added logics and capabilities, and are called smart-jacks or intelligent NID (INID). They have a printed circuit board in it and provide facilities like code conversion, signal conversion, regeneration of degraded signals, alarm – indication for troubles in lines etc.