What is POTS? Plain Old Telephone Service Line & Network Explained

October 15, 2018 | 14 min read

What Is POTS - Plain Old Telephone Service Line

The phrase “phone line” is often used, even in an era when more and more businesses are starting to rely on modern telephone systems like VoIP.
Truth bomb: In essence, a phone line is the quintessential definition of the traditional landline phone system which relies on a physical wire. Hence the term line.
The name given for this traditional telephone service is POTS (for plain old telephone service).

What is POTS?

POTS is basically an analog voice transmission phone system implemented over copper twisted pair wires. It is the phone line technology most of us grew up with at home and is exactly what you think it is: copper wires dangling overhead, carrying your voice from one place to another.

POTS networks were created to facilitate voice communication over copper cables that traversed countries and continents, and it has been the standard voice-grade telephone system used by residences and businesses across the world since the 1880’s. But the POTS most of us are familiar with is an upgrade over the rudimentary phone system invented by Alexander Graham Bell.

History of POTS

The first phone lines were suspended across poles, traversing the entire country. But advancements in technology has seen many of those lines buried underground. So why were they hung in the first place
Initially, POTS was known as the Post Office Telephone Service. This is because, in the early days, callers relied on post office operators to connect them to their intended destinations.
The service was later taken from the hands of national post offices, and the term Plain Old Telephone Service was adopted.
You may sometimes find POTS service being referred to as the public switched telephone network, or PSTN for short. This is basically the same thing, although the latter is mostly used in geeky telecom circles.

How a POTS Phone Line Works

How POTS Works
The POTS setup has remained virtually the same for decades. There have been many upgrades to usher components of the POTS telephone system into the digital era, but the copper wire connection has weathered the storm.
As far as the mechanics of a POTS lines go, this phone service works by establishing a dedicated circuit between Point A and Point B for the duration of a transmission.
Originally, communication between two parties depended on an operator to manually connect them for the call. But the aspect of switching has been automated, and today the system is almost entirely digital.

Technology Behind POTS

Let’s take a closer view into how a POTS network actually works.
Back in the days of early telephony, establishing a connection between two parties that needed to connect required stretching wires between them. Yes, much like a tin can telephone, albeit over longer distances.
POTS outdated technology image
Obviously, this meant the longer the distance, the steeper the costs.
With the emergence of POTS lines, this cost was knocked down some. One-way PSTN managed to achieve this was by placing switches at centralized points in the network. These switches acted as communication nodes between any two points in the network.
To connect one phone to another, a telephone call is routed through one or more switches operating on a local, regional, national, or international level.
telephone service connecting two homes
But voice as we speak it cannot transmit through the POTS line. The sound waves from a caller’s voice need to be converted into electrical signals in order to flow through the network. This is falls on the telephone handset on both the caller’s and receiver’s ends.
The copper line is susceptible to interference, and the signal is also prone to get weak where long distances are involved. For this reason, amplification may be called for along the way.
The early copper network only transmitted analog signals, which require a dedicated circuit since they travel in a continuous stream. This can be both a blessing and a curse.
On the upside, a dedicated circuit is as reliable as circuit technologies come. But it is handicapped by the fact that the line has to be reserved for one call and one call only. This type of switching is what is known as circuit switching.

Circuit Switching

rotary dial phone

Back in the old days, circuit switching was the reason you needed an operator’s assistance when making calls.
In those days, operators would sit by one giant wooden switchboard, plugging copper wires into a common patch panel. In the case of connections that required two exchanges, two operators would go about simultaneously plugging the caller’s and receiver’s wires into the same inter-exchange wire.
This wire was known as a “trunk”.
Long-distance calls were unbearably costly because calling long distance was akin to renting the use of a very long piece of copper wire each time you wanted to make a call.
As technology advanced, so too did circuit switching.

The first stab at automated switching came in 1891 following the invention of the Strowger switch. It was also known as a step-by-step (SWS) switch due to its operational features. Later, it pressed into service after the invention of the rotary dial.
It changed once, and then twice, finding favor among the masses. Eventually, it was phased out by the crossbar switch.
Despite their reliability, crossbars were faulted for being complicated, bulky, and costly. You can only imagine how challenging it must have been to provide excellent customer service under those conditions back then. 
Thankfully, a disruption came in the form of one of the best things to happen to the world since man bashed two stones together to ignite a fire: the invention of the transistor.


The transistor heralded the electronic exchange era, which slowly paved the way for the digital network.
Current phone lines have been upgraded to carry digital signals in the form of “packets.” Packet-based technology does not dominate the transmission channel by demanding a continuously open and dedicated circuit, unlike its analog counterpart.
Rather, it uses the underlying network to transmit voice (and data) messages independently through the switches.
A copper line is a bi-directional 64Kbps service capable of carrying human voice both ways at the same time (i.e. full duplex). However, it has a limited frequency band of 300 to 3400 Hz, meaning it cannot transmit digital signals which are in the form of “0s” and “1s”.
For this to happen, a critical hardware component needs to be added to the PSTN.


Enter the modem.
This is a device that was designed to exploit the digital nature of the public switched telephone network without overhauling your entire phone system.
This should come as good news for small business owners who are not planning to upgrade their analog communications systems any time soon, especially considering the wealth of options available on the market.
For example:

  1. DSL

DSL (Digital Subscriber Line) technology makes it possible to transmit data over your copper-wire telephone system.
A transceiver connected to your personal computer uses the local telephone network to connect to an ISP’s network. The network in turn routes data to the World Wide Web.
This type of service is most popular among small business setups. Why? Because it provides just enough bandwidth for a sizeable number of users to access the Internet.

  1. ISDN

Short for Integrated Services Digital Network, ISDN is another technology that allows digital transmission over a regular telephone line.
ISDN makes it possible to transmit both voice and data over a single copper line. To establish a network connection, users have to dial in. The fees are determined by the duration of the transmission.
ISDN promises faster call setup and higher quality calls compared to the classic telephone system. Businesses also prefer it because it comes with the option of integrating with other phone systems (PABX). This allows them to take advantage of a host of other features.
For example, using a 100-number range, queues, groups, on-hold music, etc.
It is ideal for larger businesses or those looking to expand in the near future.

How Much Does a POTS Phone System Cost?

In this era of the mobile phone and smart everything, you could be forgiven for thinking landline phones are dead and buried.
Their death knell may have been sounded by the emergence of digital communications, but it seems analog systems will stick around for a while longer.
Makes you wonder then, how much does it cost to maintain a POTS line?

For Consumers

Take a moment to do a POTS vs VoIP cost comparison. Overall, you’ll find the cost of maintaining a POTS line is much higher. But there are still situations where the old telephone system costs less to implement.
In far-flung areas and some rural areas where cell network or internet coverage has trouble reaching, the good ol’ copper lines are still relied upon. This is actually why the plain old telephone service is largely considered the Carrier of Last Resort (CoLR): the network we turn to when all else fails.
2016 POTS phone statistic
A report by the U.S. Center for Disease Control National Health Information Survey (NHIS) noted that as of December 2016, 45.9% of American households still used a POTS phone.
In some places, landlines still remain useful tools for accessing 911 emergency services and Internet DSL connections. As far as the cost is concerned, this will vary from one telecommunications provider to the next.
Generally, basic phone service that includes unlimited local calls goes for between $15 and $30 per month.

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POTS for Business

Most businesses have or are in the process of migrating from analog to IP telephony. A lot of this has to do with the fact that VoIP offers more cost savings compared to its traditional counterpart.
cost savings from switching to VoIP
If you are wondering how much a business landline costs, there is no static number to stick on this. This cost is determined by many things. For starters, setting up a landline infrastructure is expensive, so the larger the business, the more outlay to contend with, as redundant as this may sound.
Additional features like intercom, group ringing, call transfer, call queuing and phone directories have to be paid for separately. These costs add up quickly, especially when you throw in the cost of having a technician do the installation and carry out maintenance work.
Alternatively, you could simply decide to set up a complete business system that uses a PBX. (Unless your call center technology is in the cloud, it probably runs on POTS.)
A PBX system allows you to add these extra functionalities to your phone system. This does come at a cost which involves shelling out a significant amount in the name of hardware upgrade. This could run thousands of dollars.
With regard to the actual calling rates, an analog telephone system is not structured to be economical. Okay, it may look inexpensive, but when you compare it to what you get with a service like VoIP, the disparity is clear as day.
You see, before they are connected, calls made over POTS lines travel between multiple locations on a grid. This grid is made up of devices like towers, cables, telephone lines, switchboards and so on.
plain old telephone service is expensive
Transferring a call multiple times between several different locations, through the myriad devices, costs a lot. This is why many providers charge more for long-distance and international calling.
Sure, a good part of the PSTN that is used to carry, switch and route calls has been converted to digital telephony. But the system still relies on the same infrastructure, not to mention there is always that small issue of the “last mile”.
The last mile is the connection between the local central post office and the subscriber, and this portion is almost always analog.
Buzz kill: Local calling can also be expensive with POTS lines.
This is because every call is transferred through the most convenient location on the PSTN first, which could be miles away. Yes, even when making a call from one block to the next.
By and large, the cost of an analog phone system is one of the biggest drawbacks of a PSTN.

Is There an Alternative to POTS?

Advancements in technology over the years meant it was only a matter of time before POTS was replaced as the go-to phone system of choice for individuals and businesses alike.
As we speak, the telephony market is not short of options – some outdated, some semi-retired, others currently making the airwaves.
One particular phone system that seems to be the talk of town everywhere you go is VoIP.

What is VoIP?

VoIP, short for voice over Internet protocol, is the new-ish kid on the block.how VoIP works diagram
It’s not new per se, considering the technology traces as far back as 1995 (that’s two years after the World Wide Web was made free for the masses to use).
VoIP at the time was like POTS during Graham Bell’s time. Connections were beleaguered by network jitter and frequent hiccups in communication; the voice quality was awful; the technicalities were daunting; calls used to drop for no apparent reason.
Over time, though, the cost of broadband connections fell significantly – thanks, in large part, to cheaper and more powerful processing chips. This made internet phone service is not only more user-friendly but also widely available to the average business.
In early 2017, Zion Research valued the VoIP market at $83 Billion.
Again, this year, the market research company also forecasted the VoIP market to grow at a rate of 10% to reach $140 Billion by 2021.
The number of mobile VoIP users as of 2017 was estimated to stand at 1 billion.
VoIP is an interesting concept that leverages the Internet to offer phone communication.
Instead of transmitting voice (and data) through your local phone company’s copper lines, phone services based on VoIP make use of your business’s existing Internet connection to transmit voice in the form of data.
If you have used Skype to make a call, you have used VoIP. Skype, released in 2003, was one of the first in a new breed of VoIP telephone services to be introduced. Its original release made it possible to talk to another user for zero dollars.
That was a pretty big deal at the time.
Skype and other similar services like it, however, are typically used by individuals. Businesses seeking to leverage the same technology on a larger scale should make use of an enterprise-level service like Nextiva.


With the proliferation of online communication channels and social media, voice calling is not as popular as it used to be.
Businesses continue to depend on phones for their day-to-day workflows. For example, departments like sales, marketing, tech support and customer service cannot afford to function without phones.
The biggest draw for businesses when it comes to VoIP service is the cost savings this service brings.


Remote office phone systems include many advanced features like auto attendants, HD calling, dynamic call forwarding, VoIP softphones, and team messaging. VoIP puts these popular features within reach of every business. 
It is not lost on most people that migrating to VoIP can save business money in the long run. This is made possible by the small setup costs required, the low-priced plans to contend with, and the ability to make free calls to those within the company.
More than that, VoIP offers a lot of benefits that don’t come with PSTN. Here is a feature-by-feature comparison.




Connectivity Type Internet connectivity using packet switching. Circuit switching on a dedicated telephone line.
Bandwidth Requires approx. 10Kbps in each direction, taking up and releasing bandwidth as needed. Typically requires 64Kbps in each direction; bandwidth is reserved in advance.
Scalability System upgrades usually require bandwidth and software updates only. Upgrades involve purchasing more hardware and dedicated lines, which can be a costly and complex affair.
Remote Extensions This feature is usually standard. Requires adding a dedicated line for each extension; can be pricey.
Disaster Recovery Service becomes unavailable when there is no power or Internet connectivity. This is why it’s prudent for businesses to have a VoIP disaster recovery plan in place. Phone jacks don’t need electricity to function so service remains available during a power outage. The same cannot be said of cordless phones.
Call Waiting/ Call Forwarding/ Call Transfer Business VoIP solutions provide these services in standard packages at no added cost. Available for payment separately.
Emergency Calling Not a guaranteed provision or is limited. 911 calls are also non-traceable. Enabled and services are traceable to location.
Pricing Free VoIP-to-VoIP calling (local and international). Cost is not based on distance and time. No free calling and international calls are steep. Cost is based on distance and time.

VoIP offers a whole lot more in terms of features. Here is a detailed list of office features offered by Nextiva.


Scalability is important to every business. This refers to the ability of a multi-line phone system to handle increasing demands without adverse effect on the system’s overall performance and efficiency.
This is an extremely valuable characteristic to look at for small and medium-sized businesses whose needs and demands are subject to change on a regular basis.
POTS are limited to the number of lines you have connected, and you will need to upgrade your hardware if you plan to add more.
This is not the case with VoIP, which has scalability as its most significant technical advantage. A VoIP system allows for an unlimited number of lines reliant on your internet connection.
For startup companies aiming to expand, this is something that can help them avoid some common growing pains. They can tackle new opportunities as they arise without having to grapple with unnecessary costs, hassle and downtime – and do so while looking bigger than they are by taking advantage of the multiple VoIP features.


Speaking of advantages, desktop softphones are another way businesses can unlock the wonderful world of VoIP.
This piece of software acts as a phone interface, complete with a virtual dial pad. This perhaps explains why they are sometimes referred to as “soft clients” in the industry.
A softphone allows you to dial phone numbers and accomplish other phone-related functions via a computer or other Internet-enabled screen using your keypad, mouse or keyboard.
Calls made using a softphone are connected via the Internet – not through a chunky desk phone and series of wires.

Indeed, this is one of the perks of using softphones over regular phones with VoIP.
Softphones use specially designed software to operate directly through your server without any dangling wires or bulky equipment lurking around every corner.
Desktop softphones also provide great flexibility in terms of location. Employees can stay connected without the need to be in the office, making and taking calls from any computer connected to the Internet.
If you are worried about whether this comes at an added cost, you might be surprised to hear it actually saves you money.
This benefit is two-pronged:
For one, softphone technology doesn’t require the use of handsets or terminals. This means you stand to save money just by losing the hardware.
As well, your calls are cheaper since VoIP communication is billed by the bandwidth, as opposed to distance and time.
Another area in which softphones shine is through real-time visibility.
This feature relays the availability status of team members. This allows you to make contact with only those people who are able to answer the phone.
For instance, assuming a sales executive wants to get in touch with her or his product manager, they can take a quick look at the product manager’s virtual office desktop to see his/her status. If it’s set to “Do Not Disturb”, the sales executive can opt to leave a message without calling and being transferred over.
Softphones also have SMS capabilities that allow employees to incorporate text messaging into sales and support operations.
This makes for a great avenue to nurture leads, reach out to customers and prospects, provide technical support, and engage in just about any type of communication that involves one-on-one interaction.
text messaging business communication
You could also say softphones come in handy when it comes to scalability. If and when you decide you need to move to bigger premises, you will take your softphones with you without being compelled to change your telephone number, upgrade your software or make any new installations.


  • Can a POTS phone work on VoIP?

Yes. VoIP technology allows you to use different types of phones. You can use traditional phones (POTS phone), IP phones, softphones and others.
Most phones can work with an ATA adapter – an intermediary device that allows communication between an analog phone and VoIP.
But to take full advantage of VoIP features, you should get a SIP-enabled phone like the ones found here: https://www.nextiva.com/products/voip-desk-phones.html

  • How do I know how much bandwidth I have?

When it comes to VoIP, it helps to know how much bandwidth you really have. Your ISP (Internet Service Provider) will probably only confirm the advertised “up to” value (aka what you signed up for). For example, “up to 25Mbps” or “up to 50Mbps”.
The best way to determine your bandwidth is to run a throughput test designed especially with VoIP in mind.

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Cameron Johnson


Cameron Johnson

Cameron Johnson is a market segment leader at Nextiva. Along with his well-researched contributions to the Nextiva Blog, Cameron has written for a variety of publications including Inc. and Business.com. Cameron was recently recognized as Utah's Marketer of the Year.

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