A LAN telephony system requires both a device to process incoming and outgoing calls to determine what address on the LAN a call will be sent to and also a voice gateway that connects the LAN telephony system to the PSTN. Each telephone on the LAN has its own network address and converts audio signals to digitized packets for transmission across the LAN. When a call is received from outside the LAN, the call processor determines which network address receives the call and forwards the packets to that address. When a call originates within the LAN, the call processor determines if the packet is to be forwarded to another network address or to the PSTN, in which case the packets must travel through the voice gateway.
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