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In this video, Tony from Nextiva explains the basics of VoIP (voice over internet protocol) phone systems, which use the internet to make and receive calls. To set up a VoIP phone system, you will need a modem as the main gateway for all devices to connect to the internet. It is important to research and choose the best modem for your business. Additionally, ethernet cables will be used to connect all devices to the modem for the system to function properly.