The distinction isn't actually digital vs. analog but in-band vs. out-of-band. For dialing, it might as well be in-band, since the end user has to have control over it. They used to also do things like authorizing long-distance calls through in-band signalling, which is why phreaking worked. Phone company equipment sent audio signals to other phone company equipment over the same line that you were talking over, so if you made the same audio signals, the target equipment would respond in the normal way. That's all out-of-band now (the equipment communicates over lines that you don't have access to), so that's why you can't phreak that way anymore. If they had kept it in-band but just switched to digital, you could still phreak; it would just need something more sophisticated than a whistle from a box of Captain Crunch.
I see. I figured that there was new infastructure by now to accomodate all of the data needs the modern world has. I know very little about POTS other than it being the original backbone of the early internet and land lines.
The modern telephone system is, as I understand it, basically a parallel Internet with different protocols and equipment specifically geared toward audio. In some cases, it probably goes over the actual Internet. Back in the day, though, every telephone conversation needed a dedicated piece of copper from one end to the other. That piece of copper was assembled bit by bit through switchboards. That's also why long distance calls were so expensive: if you only had 100 copper lines between the US and Europe, then you could only have 100 simultaneous calls between the US and Europe. Today, if you have 100 fiber lines between the US and Europe, that might let you have 100000 simultaneous calls between the two regions.
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