Bit of a newbie question, but what exactly does the telephone exchange do for the internet?
Is this where the packets that leave your router go to, to connect to your isp?
The telephone system is only involved in internet connectivity when the copper telephone lines are used for a DSL line. At the user's end the copper line goes into a splitter that separates the phone frequencies from the DSL frequencies. The phone signal goes to a plain phone and the DSL signal goes to a DSL modem. The same happens in the local telephone exchange. The signal is split and the phone signal goes to the classical telephone system. The DSL signal goes to a DSLAM (Digital Subscriber Line Access Multiplexer). Depending on the rules/laws/customs of the country this DSLAM is operated by one or more ISPs, the incumbent phone operator or specialised DSL operators. It might be that there are DSLAMs of multiple operators in the local telephone exchange station.