Creating projects that connect to the phone line can be a real chore without some device like this. It generates the 48 volts DC for the on-hook condition, the 100 volts AC for the ring signal, and the 20 milliamperes DC for the off-hook condition. To use the device, a phone is connected to the left jack. When it is picked up (off-hook), a ring signal is generated at the right jack.
When the device on that jack goes off-hook, the ring is terminated, 20 ma is provided thru 600 ohms, and the 2 lines are connected for audio. When the phone is hung up, a 250 ms line break is created on the other jack to indicate the end of the phone connection.
This allows testing of incomming phone devices only (i.e. answering devices).
Here are the Source, Object, and Schmatic files.