Once upon a time, the POTS system used something called 'in-band signaling'. An example of that was really old coin telephones, where the devices would send certain tones to tell the operator which coins you had deposited. John Draper (aka Capt Crunch) exploited this in-band signaling to access the toll network, and make long distance calls as tho he had trunk signaling and origination. I assume that anything Woz was doing was similar to this. Bell Labs responded by moving the toll signaling out-of-band. Out of all this, and for other more important reasons, was born SS7.
edit: from the wiki article on SS7 ...
SS5 and earlier systems used in-band signaling, in which the call-setup information was sent by playing special multi-frequency tones into the telephone lines, known as bearer channels in the parlance of the telecom industry. This led to security problems with blue boxes. Modern designs of telephone equipment that implement out-of-band signaling protocols explicitly keep the end-user's audio path—the so-called speech path—separate from the signaling phase to eliminate the possibility that end users may introduce tones that would be mistaken for those used for signaling.
edit: from the wiki article on SS7 ...
SS5 and earlier systems used in-band signaling, in which the call-setup information was sent by playing special multi-frequency tones into the telephone lines, known as bearer channels in the parlance of the telecom industry. This led to security problems with blue boxes. Modern designs of telephone equipment that implement out-of-band signaling protocols explicitly keep the end-user's audio path—the so-called speech path—separate from the signaling phase to eliminate the possibility that end users may introduce tones that would be mistaken for those used for signaling.