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Instead of using an analog phone signal over traditional telephone wires, digital phone services break down voice information into "packets", and send them over data lines to allow voice and data to travel on the same pipe. Analog phone service is also referred to as "circuit-switched" telephone or the PSTN (public switched telephone network).
Known as "Voice-over-Internet-Protocol" or VoIP, digital phone service costs are greatly reduced as voice and data can share the same lines. Features are also carried along with the phone signal, greatly reducing the costs to the carriers which are passed along to you. VoIP services offered over the public Internet are
also offered at much lower rates, as there are no costs associated with the maintenance of a private network. The trade-off is cost vs. reliable phone call quality.