Years ago the standard telephone line (POTS or Plain Old Telephone Service) was all we knew. It worked for local and long distance. It also worked great for analog devices such as modems and fax machines. These devices send a high pitched, modulating squeal and are received on the other end. This modulating squeal is deciphered on the other end and turned into usable data or a fax.
The advantage of POTS technology is it is a one-to-one dedicated connection from one phone, modem or fax to another while the call is in place. This dedicated circuit is continuous and uninterrupted. The circuit is such that when a message is sent, is received in the same order it is sent. So, sending the message "Mary had a little lamb" was received as "Mary had a little lamb". It worked reliably with little complexity.
Then along came the internet. The internet was brought to life expressly to combat the simplicity of the one-to-one connection. The problem with this type of connection is obvious: if the line is broken the communication is lost. The US military saw a need to continue communications during a war even if certain telephone lines were damaged. Therefore the internet protocol doesn't rely on a dedicated connection.
IP communications break a message into packets. These packets are sent in any of an infinite web of servers to go from the server to the receiver. If one path is broken, damaged or busy, the packet gets re-routed. It eventually gets to the receiver where it is reassembled and put in order. Because the message is broken up and potentially sent all over the plance, the same message may be received as "had a Mary lamb little" Then the receiving device reassembles it and reorders it into the original message.
This works great for lots of things such as email. It has proven to be a challenge for real time or streaming media where the message has to quickly be sent, received, reordered and delivered.
One of the last devices to come into the internet age is the simple fax. But now, with the advent of the T.38 IP fax protocol, this is on the verge of changing. The old fax machine will be a thing of the past in short order.
Currently there are two common options for IP faxing.
1. A T.38 device send to a T.38 fax server. This server then converts the message to a standard analog fax protocol and sends to a typical fax.
2. Newer devices are smart in the sense that they can send to another T.38 IP fax or to an older traditional fax.
IP faxing is a way to save on long distance cost, reduce the number of needed standard phone lines and improve fax quality all at once.