Virtual gateway system and method

Existing (already installed) plain old telephone service (POTS) wiring at a customer premises is used as the wiring infrastructure for a local area network and additionally continues to provide ordinary POTS services at the customer premises. The network signals associated with the local area network and the POTS signals delivering POTS services coexist on the POTS wiring at the customer premises using frequency division multiplexing. In additional to POTS service, the subscriber loop also provides access to xDSL (digital subscriber line) signals associated with a wide area network (WAN). Thus three distinct networks (the PSTN associated with POTS, xDSL and the LAN)) coexist on a single wiring infrastructure. A virtual gateway provides for communication between each of the distinct networks without breaking the electrical continuity of the POTS wiring at the customer premises and thus maintaining lifeline POTS services, without the installation of a new dedicated active (needing AC current) Gateway device, and without the need to pull new cable to implement the premises LAN.