What is the difference between POTS and VOIP

Here is a good explanation from Cisco

Cisco IOS uses two types of dial-peers. They are defined as:

  • Plain old telephone systems (POTS) dial peer—These define the characteristics of a traditional Telephony network connection. The POTS dial peer maps a dial string to a specific voice port on the local router/gateway. Normally, the voice port connects the router/gateway to the local public switched telephone network (PSTN), private automatic branch exchange (PBX), or telephone.
  • Voice-Network dial peers—These define the attributes of a packet voice network connection. Voice-Network dial peers map a dial string to a remote network device. Some examples of these remote network devices are listed here:
    • Destination router/gateway
    • Cisco CallManager
    • Session initiation protocol (SIP) server (for Voice over IP SIP)
    • Open Settlement Protocol (OSP) server (for Voice over IP that uses settlement)
    • H.323 Gatekeeper
    • Mail Transfer Agent (MTA) Server (for Multimedia Mail over IP scenarios)The specific type of Voice-Network dial peer depends on the packet network technology used. Different technologies used by dial peers are explained here:
    • Voice over IP (VoIP) – The dial peer is mapped to the IP address, Domain Name System (DNS) name, or server-type of the destination VoIP device that terminates the call. This applies to all VoIP protocols such as H.323, SIP, and Media Gateway Control Protocol (MGCP).
    • Voice over Frame Relay (VoFR) – The dial peer is mapped to the data-link connection identifier (DLCI) of the interface from which the call exits the router.
    • Voice over ATM (VoATM) – The dial peer is mapped to the ATM virtual circuit for the interface from which the call exits the router.
    • Multimedia Mail over IP (MMoIP) – The dial peer is mapped to the e-mail address of the Simple Mail Transfer Protocol (SMTP) server. This type of dial peer is used for Store and Forward Fax (on-ramp and off-ramp faxing).

The Cisco IOS command to enter into the dial peer configuration mode is:

maui-nas-07(config)#dial-peer voice number ? 
  pots   Telephony
  voatm  Voice over ATM
  vofr   Voice over Frame Relay
  voip   Voice over IP

REF: http://www.cisco.com/en/US/tech/tk652/tk90/technologies_tech_note09186a008010ae1c.shtml

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