How significant is PSTN (POTS?) today?

To complement jcbermu's answer, a few historical points:

  • at first, the whole telephone network was analog. You had copper wires from a premise (office or home) to an exchange (initially manual, then automated), wires from exchange to exchange (possibly several), and again wires from the last exchange to the destination premises. Beyond some amplification and other treatments such as noise filtering or echo cancellation, it was the same original analog signal that was sent all the way through.

    Note that when you used modems, you sent a digital signal as analog, and it had to deal with the bad quality of an analog link and all the complications introduced by the systems that were meant to optimise voice, but could be a problem for digital.

  • then, in the core of the network, the links between the exchanges were replaced with digital links. The exchanges at both ends performed analog-to-digital and digital-to-analog conversion. The link between the user premises and the exchange was still analog, while in between the links were converted to digital.

  • ISDN is the extension of that digital conversion to the end-user premises. Use the same copper wires, but transmit digital signals on them, not analog. Digital/analog conversion is done on premises (depending on the exact architecture, it may be done by several different pieces of equipment).

  • the low-level technology of ISDN is DSL, by definition a "Digital Subscriber Line". BRI (T0) used very low speed DSL (144-160 kbit/s IIRC). PRI (T1/T2) higher speeds (1.5-2 Mbps). PRIs initially used special cabling (thicker wires, more shielding), but that was then replaced with SDSL which uses the old regular thin copper wiring that was original used for phone service.

    However, contrary to modern xDSL services, the core circuit-switched network of PSTN was still used. Yes, there was a little bit of packet-switched data possible on the D channel, but that remains minimal.

  • Further improvements to xDSL were introduced, including ADSL, ADSL2, ADSL2+, VDSL, VDSL2... The principle is still the same: use the existing copper wiring (often decades old) between exchanges and customer premises, but with higher and higher speeds. The difference however is that instead of carrying (mostly) voice over switched circuits (the base of PSTN), data is carried which is packet-switched (IP) or cell-switched (back in the days of long-distance ATM).

So:

PSTN = premises-to-exchange wiring + circuit-switched exchange-to-exchange network.

POTS = analog voice service over the premises-to-exchange wiring.

ISDN = digital service over the premises-to-exchange wiring. Still using circuit-switched network.

Most xDSL technologies: digital service over the premises-to-exchange wiring, packet-switched network.

Tech | End-user/Exchange | Long-distance network
-----+-------------------+--------------------------
POTS | Analog            | Analog, circuit-switched
POTS | Analog            | Digital, circuit-switched
ISDN | Digital           | Digital, circuit-switched
xDSL | Digital           | Digital, packet-switched

PSTN = End-user/Exchange wiring + circuit-switched network.

To answer your questions more specifically:

  • How significant is PSTN today? It's still used for all voice calls to/from a landline, and even mobile calls are mostly routed through the core of the PSTN

  • How significant is POTS today? Nearly all consumer landlines are POTS. Medium and large business use ISDN or VoIP. Some consumer landlines use VoIP (if you connect your phone to the back of your DSL or cable box it's VoIP).

  • Is ISDN any relevant today? For data (which was one of the primary selling points for ISDN in the consumer/SoHo market), it's probably as good as dead. For voice, it's used for medium/large businesses which haven't switched to VoIP yet.

  • How significant is the PSTN today for internet connections? Very very marginal.

  • How significant is the PSTN today for telephone? Still the backbone of the telephone system.

  • Doesn't DSL use the PSTN? Modern xDSL technologies use the "last-mile" part of the PSTN, the exchange-to-premises copper wiring, to carry data. But instead of having the line connected to a telephone exchange that does circuit-switching, it is connected to a modem in a DSLAM which is then connected (directly or indirectly) to the Internet.


PSTN : Public Switched Telephone Network

POTS: Plain Old Telephone Service

PSTN is the infrastructure, it means the cabling from home to operator buildings, the switching equipment in those buildings, the links from site to site using E3 connections, microwaves,etc.

POTS is the traditional voice service offered using the PSTN infrastructure. A service to make and receive calls using numbers.

ISDN is part of PSTN, with ISDN is possible to provide voice /data services using a single connection.

ISDN has lost relevance in home / soho business because xDSL technology provides better speed (In the order of 2-5 Mbps) than BRI connections (128Kbps), however ISDN PRI connections (2 Mbps / 30 digital voice channels) are still used to give voice services in medium - big size companies.

xDSL is used to provide data services to home and soho business, but it's being slowly replaced by fiber optic connections.