The Loop (telecommunication) reference article from the English Wikipedia on 24-Apr-2004
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Loop (telecommunication)

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Hardware or software device which feeds the incoming signal or data back to the sender.

Local loop is a telecommunications term for the "last mile" connection from the trunk to the subscriber.

A modem can be configured to loop incoming signals from either the remote modem or the local terminal. This can be used for error diagnostics, comparing the data sent to the data received.