Giving VoIP Traffic the Green Light, Part 1 - page 2
Bandwidth is Not Speed
TCP/IP networks (see below) are packet-switched, while traditional voice networks are circuit-switched. When you make a call on a circuit-switched network, the call is assigned a single dedicated un-shared circuit for its full duration. You don't experience network slowdowns, because when the network is filled to capacity, new calls can't be completed until someone hangs up. So for the most part, voice calls over the PSTN (Public Switched Telephone Network) are good quality and do not suffer from lag or interruptions. If part of your communication is mangled, you say "huh?" and receive a re-transmission in real time.
Packet-switched networks operate differently. Data streams are broken into small packets that march like a stream of ants across the network, often taking different routes to their destination, where they are then reassembled. All traffic streams share the same wires at the same time, which is good inasmuch as it substantially increases the carrying capacity of the network.
This works fine for data transmissions, but less well for the quality of IP voice calls, which require a smooth, uninterrupted, low-latency stream. You have no control over what happens after your VoIP packets leave your network, but at least you can give them a good start. You have a lot of control over your LAN performance, which is important for your overall VoIP quality.