Much of this information has been extracted from a wikipedia article on DSL. A large part of understanding DSL is getting a grip on the terminology, so hang on and get ready for lots of acronyms.
DSL works over your phone line (at the same time as voice traffic) because voice is limited to 5khz and below, and DSL carrier frequencies are above 25kHz. Actually voice is limited to 300 to 3400 Hz, which has been deemed adequate to allow human speech to be clearly audible. Speech is normally digitized by sampling 8 bit values at 8000 samples per second, yielding a 64 kbit/second data stream.
ADSL is the first step above a "voiceband modem" (which had typical top speeds of 56 kbits/second). The "A" in ADSL stands for "Asymmetric". Standard ADSL uses 26-137.825 kHz for upstream data, and 138-1104 kHz for downstream data. These ranges are divided into "bins" 4.3125 kHz wide. Modem training checks each bin and decides which can be used (at greater distances and due to possible interference, not all bins can be used, or may not be usable at full capacity.
Now it would be possible to allocate equal numbers of bins for upload and download, this would be SDSL (Symmetric DSL). Most customers however, are benefited much more by having more bins allocated for download, hence we have ADSL.
CAP (Carrierless Amplitude Phase Modulation) was used in early days (but was deprecated in 1996). Now the usual transmission method is DMT (Discrete Multitone Modulation).
ADSL2 extends ADSL to speeds of up to 12.0/3.5 downstream/upstream.
ADSL2_ extends ADSL to speeds of up to 24.0 Mbit/sec downstream.
A DSLAM is the piece of equipment at the "other end" of your DSL connection. DSLAM stands for "DSL Access Multiplexer". It is effectively a "layer 2" network switch and splits voice and data traffic and routes them onto the phone companies internal network. A DSLAM could be housed at a central office, or could be in a manhole or SAI (Serving Area Interface) box.
The next piece of equipment on that network is typically a BRAS (Broadband Remote Access Server). It is the BRAS that provides PPP sessions and routes traffic to an ISP backbone network. The connection between a DSLAM and the BRAS can be ATM, ethernet, or other. The PPP sessions can be "over Ethernet" (PPPoE) or over ATM (PPPoA). The BRAS handles authentication and accounting. It is entirely possible that the BRAS is located at a central site and is connected to the DSLAM (at remote and distributed sites) via fiber pairs.
The "Access network" is the boring and extensive collection of wires, fibers, poles, and cables between the telephone exchange and the termination point at the customers premises. Unsophisticated as it may be (or seem), it may be the largest physical asset owned by a phone compnay. Given the migration from POTS (plain old telephone service) lines to cell phones, this infrastructure continues to have relevance only if the phone companies can keep customers interested in DSL internet or wired television.
Speeds available at a customers site depend on the distance from the DSLAM as well as quality of the lines. At a distance of 3 miles, speeds are limited to 1.5 Mbit/sec. At a distance of 7000 feet, speeds are limited to 16 Mbit/sec.
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