The most basic and traditional phone service is called POTS or Plain Old Telephone Service. Chances are that you won't see it advertised that way. Instead it will be called business line or dial tone service. What you get is an analog connection to the nearest telephone company Central Office or CO. Any conventional telephone will plug into the RJ11 jack on the wall and give you dial-tone when you lift the handset. You can expand the number of rooms with phones by paralleling twisted pair wiring to other phone jacks. But you still only have one line and, if it is in use, no one else can make or receive calls.
Basic POTS is local phone service. Long distance service is either bundled for a single price or assigned to a competitive long distance carrier that offers lower per-minute rates on separate billing. Caller ID is an add-on service that is multiplexed on the same phone line and displays the caller's phone number and other information on phones with the necessary display, or a separate Caller ID unit. Toll free service can be added to forward incoming calls from a toll-free number to your phone line.
A logical upgrade from POTS is to add a separate identical line service and use a two-line business phone. These are commonly sold in office supply stores and can work well for small offices. Such phones are entry level Key Telephone Systems. What distinguishes a key system is that there are buttons or "keys" on each telephone to select the desired phone line. These buttons flash to indicate the line is ringing with an incoming call or light steadily to show that line is in use. Larger key systems can handle a half-dozen separate phone lines.
Businesses with 6 or more outside lines are likely to switch to a PBX or Private Branch eXchange phone system. Like the name implies, this is a mini telephone company office on your premises. Once giant racks full of equipment, the modern PBX may be just a small box that sits on a shelf in the telephone closet. PBX systems work differently from Key systems. The PBX manages all the phone lines for incoming and outgoing calls. It also interconnects all the telephone handsets so you can dial from phone to phone inside your building without incurring any telephone line charges. When you need to make an outside call, the PBX system will assign you the next available line. You don't really need to know which one it is, they all work the same. Callers can directly dial a number for your phone, called DID, or reach an automated system where they can enter your extension number. The PBX will then ring your phone.
Up till now the phone lines we've been discussing for all of these different telephone systems are individual analog POTS lines. You pay for each one separately and the total cost is generally the cost per line time the number of lines. Once you need 8 to 12 lines or more, it usually makes economic sense to switch to digital trunk rather than use multiple analog lines.
The digital trunk, called a T1 voice line, converts up to 24 separate phone lines into a single digital connection between you and your phone service provider. The most popular variety of T1 service is called T1 PRI or Primary Rate Interface. It is also known as ISDN PRI for Integrated Services Digital Network. The difference between a T1 PRI line and a T1 voice line is that the PRI protocol establishes one channel of the 24 as a switching and data channel. This makes calling faster and allows you to have Caller ID for the other 1-23 channels or 1 to 23 outside phone lines.
If your phone system has grown over the years to a dozen or two dozen analog phone lines, it's time you got a competitive quote for T1 PRI lines service. Connecting PRI to your PBX system usually involves plugging-in a special interface card if your system doesn't already have one. Many new PBX systems come with this connection feature.