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from the Plum Voice IVR Glossary
A bit is a single binary digit. Unlike a single decimal digit representing a value of 0 through 9, a bit holds a value of either 0 or 1. Similarly, while decimal numbers are, implicitly, base 10, binary numbers, which are composed of many bits, are base 2.
Specifically in the case of IVR systems and telephony, bits are frequently used to define either the amount of detail contained in a single audio sample (e.g. 8-bit versus 16-bit audio) or the rate at which data is sent from one system to another (e.g. all digital telephony systems transmit audio data for a single phone call at 64 kilobits per second).
This is critical when considering audio encoding formats. The goal of choosing an encoding format is to balance quality with file size and available bandwidth. All phone circuits in North America are 8 kHz audio streams with 16-bit samples that have been compressed to a mere 8-bits using u-law compression in order to fit the conversation within a 64 kbps pipe. Thus, there is no value in using any audio encoding other than u-law because every audio stream must be compressed to u-law eventually anyway.
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