That describes the commonly used telephone line.
The term "loop-start" is as opposed to a "ground-start" line.
Typical telephone sets use a loop-start line because they are electrically isolated from ground.
PBX's often use ground-start lines (rather than real trunks) to connect to the Public Switched Telephone Network (PSTN). Ground-start allows easier "anti-glare" implementation, which prevents the line from being seized at exactly the same time by both ends (which is an unnecessary feature for a regular telephone set).