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DSL became possible due to the improvements and reduction in cost of sophisticated communications processors. DSL talks to and from a special device at the central office called a DSLAM (Digital Subscriber Line Access Multiplexer. When the phone company installs DSL, they take the phone company end of your copper wire and install a signal splitter that feeds the existing voice signal into the existing voice phone system, and feeds the high frequency digital signals into the DSLAM), The high frequency digital traffic is routed through the DSLAM to your ISP (which may or may not be your local phone company). The DSLAM and your DSL modem (actually not an accurate term) adjust frequencies and voltages during the day to prevent the cross talk between lines. Keep in mind that the high frequency signals are not audible on your phone, as they are much higher than your ears can hear. On your end, filters are placed on the existing phones (usually by you if you elect a self-install) to keep the voice and data signals from interfering with each other.
The common types of DSL:
Unless you sign up with your phone company, there are at least two and frequently three parties to your service. In almost all cases, the local phone company provides the copper wire, and they want to be compensated for the use of the circuit. The second party is the company that installed the DSLAM at the phone company and routes the digital traffic from the DSLAM into the internet. The third party is the ISP that provides you with email service, newsgroups, technical support, billing, web space, etc... Frequently the 2nd and 3rd parties are the same - a CLEC that runs an ISP service... If you go with the DSL offered by your phone company, all three services are provided by them (although they may outsource the ISP services - for instance, SBC uses Prodigy as their ISP, Qwest is using MSN). A number of companies went into the business of competing with the local telco by installing DSLAMs in colocated space in the phone company. Many of these companies faced resistance from the local telco in installing the DSL connections or clearing up the provisioning problems (load coils, noisy lines, etc...) and most of these companies are now in bankruptcy.
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