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Public and private telephone systems provide real-time information paths between two or more parties. Traditionally, these information paths have taken the form of voice connections, originally through hardwired analog circuitry but later through an increasingly broad range of technologies such as radio transmission, digital signal encoding, and fiber. Over time, these transmission paths were also exploited for non-voice applications such as facsimile and data transmission.

At first, each non-voice application required a distinct set of dedicated "terminal equipment", the telephony term for any user device connected to the telephone network. Facsimile machines conversed only with other facsimile machines, computer devices sent data files only to other computer devices, and so forth. But in the 1990s, these disparate sets of equipment have begun to overlap, and the general-purpose computer has emerged as the point of intersection.

Computers can now send and receive every kind of information that passes through the telephone network: They can act as facsimile machines; they can interact with human speakers through voice synthesis and recognition; and of course they can send and receive data in many in many formats. It is this intersection, with the general-purpose computer serving as the interface point, which makes computer telephony so intriguing and potentially valuable to the marketplace.

Computer telephony today is characterized by a wealth of choices and options. Computer telephone applications can be small or large in scope, simple or complex in operation. Any single feature can be implemented in a staggering number of ways, with implementation choices on both the telephone and computing sides of the equation. There is no right or wrong way to build a computer-telephone system.

The main activity with regards to computer telephony at present is Internet telephony. Internet telephony or IP telephony allows the user to make a telephone call, be it long distance, regional or local, over the internet using voice over IP. The main advantage of voice over IP is that it sends packets of information and does not require the use of a dedicated circuit for the duration of the call. This is a major breakthrough in terms of cutting costs for the customer and has the added benefit of many more functions due to the use of a computer to make the call.