Echo is always caused by the analog components in the telephony system. The digital stream of packets traveling in one direction of a VoIP call cannot “bleed into” the digital stream of packets in the other direction, nor are the packets played back at the receiving end of the call. The same is true for the digital parts of the Public Switched Telephone Network (PSTN). Although the underlying electrical signals that carry the bits over the PSTN are, indeed, analog, the corruption of those signals results in digital noise or other problems, but not in echo.
Strictly speaking, echo is never caused by VoIP. In fact, what happens is that the longer delays introduced by all VoIP systems reveal echo that was imperceptible with the shorter delays of the PSTN. By delaying existing echo signals longer, the VoIP network causes them to fall outside that 25 ms window and become audible to us.
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