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The simple answer is each phone line from every house goes directly all the way to the cabinet. The poles just hold the wires up. They're not linked to anything.

The cable going up each pole contains individual wires for every house (and a lot of spares). If it looks like just one cable it's simply a load of separate cables wrapped in a single bigger cable. They call it a bundle.

After all, the phone line coming into your house looks like just one cable, yet there are four or more wires inside it.