• I will assume you are referring to a "voice over internet" type service. Essentially, a computer equipped with a microphone and speaker is hooked up to a broad-band connection. It runs a program that encodes the signals from the microphone and sends them over the internet to another like-equipped computer which decodes them and sends them to its speaker and vice-versa. The paid service manages the connections, phone numbers, software and other things.
  • I understand broadband to mean ADSL. This is the always on service where you pay for the service and can use the net and talk on the telephone at the same time. This works by using a different frequency on the telephone line. Voice calls use the 300hz- 3000hz range as that is the general range of human speach. ADSL uses a higher frequency range which is outside the range of the human ear. It means you can't hear the computer screaching noises that you could when using a normal 56k modem. An ADSL modem converts the network packets (information) into a high frequency squeak and sends it to the exchange. High frequency noises can't travel as far as lower frequency noises hence the 3km range from the exchange that is stated in ADSL service contracts. When the signal gets to the local exchange, it is converted into a standard networking signal and forwarded into a Wide Area Network link with the internet. Your equipment doesn't notice a thing. It thinks you have a direct connection with the internet.
  • If you ever use a popular chat program, this is essentially how it works but instead of using a computer to chat, your phone is connected to a device that's connected to the internet and works transparently in the background to allow you to call and chat on regular phone lines. I personally use a device made by D-Link which acts in a way much like this that will allow me to forward my Skype calls via my computer to my cellphone using my phone line. With this device, people can call me from around the world on my cellphone for free and the sound quality is good if not excellent.
  • It is basically VOIP (voice over IP). Even back in the dial up networking era I chatted from the US with a guy in Holland over dial up networking at no cost (with some app through a website). It is likely similar to the same thing that does audio for YouTube videos, etc., but a 2-way street (send and receive). It encodes each direction as an audio stream. I don't use WiFi calls for my phone connected to WiFi because mobile voice (or even mobile data at 4G LTE) is faster than my DSL (5.1 Mbps at best)

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