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DSL stands for Digital Service Line and it the signal comes over your telephone line.  Unlike the old dialup, DSL allows you to be on the telephone and Internet at the same time.  It does this by using a different frequency range for the Internet than it does for voice.  Humans can generally hear between 20Hz and 20KHz frequencies, but our voices only range between about 0Hz and 4KHz.  DSL usese frequencies up to 1MHz.  Think of it like tuning in a radio station.  There are lots of radio stations out there, yet you can tune in just one.  That is because different frequencies can travel simultaneously without interfering with each other.  So, while you are happily chatting away on the phone using a low frequency range the DSL signal is doing its thing in a completely different frequency range.  The DSL modem simply "tunes in" the frequency it's looking for and ignores the one you're using.

It may surprise you to know that you CAN usually get DSL service without having to have telephone service as well.  Yes, it comes over the phone line, but since it uses a different frequency range that phone line does not need to be "active" for the lower frequency range, meaning you do not have to have phone service on that line as well.  Of course this is at the whim of your ISP.  Some providers do not offer Internet without the phone service.  But with so many people dropping home telephone service anyway it's really in their best interest to offer whatever services a customer is willing to pay for.

DSL is not the fastest Internet service, but, depending on your area, it is often one of the best values for your money.  Speeds range greatly depending on your area and how far away from the provider's equipment you are "as the line lays", but DSL can currently go as high as 20Mbs (20 magabits per second) on a "bonded" DSL service.  Bonded DSL means that the signal comes over two phone lines simultaneously.