An ISDN alarm notification (fault locating) system in subscriber transmission equipment is connected to switching equipment conforming to TR-303 standard, in particular. The system includes a controller for setting switch options in subscriber transmission equipment externally, in addition to a digital switch and subscriber transmission equipment. The subscriber transmission equipment is provided with a switching equipment interface unit, a control path unit, and an ISDN subscriber interface unit. The controller sets the switch options provided in the switching equipment interface unit, the control path unit, and the ISDN subscriber interface unit. Thereby each switch option performs identical function, corresponding to each digital switch connected to the subscriber transmission equipment. Thus an ISDN alarm can be notified accurately to any TR-303 digital switch even network terminals NT1 of different types are connected to ISDN subscribers, and the compatibility with conventional services (TR-008 POTS/ISDN, TR-303 POTS/ISD N) is maintained.