|  | 3.2 | Evolution of Network Devices
| 3.2.3 | Evolution of networking devices and the OSI layers
Hosts and servers operate at Layers 2-7; they perform the encapsulation process. Transceivers, repeaters, and hubs are all considered active Layer 1 devices, because they act only on bits and require energy. Patch cables, patch panels, and other interconnection components are considered passive Layer 1 components because they simply provide some sort of conducting path. NICs are considered Layer 2 devices since they are the location of the MAC address; but since they often handle signaling and encoding they are also Layer 1 devices. Bridges and switches are considered layer 2 devices because they use layer 2 (MAC address) information to make decision on whether or not to forward packets. They also operate on layer 1 in order to allow bits to interact with the media. Routers are considered Layer 3 devices because they use Layer 3 (network) addresses to choose best paths and to switch packets to the proper route. Router interfaces operate at layers 2 and 1 as well as layer 3. Clouds, which may include routers, switches, servers, and many devices we have not yet introduced, involve Layers 1-7.