An infinitely simpler version of this is to connect the phones together with a power supply (48VDC) over two (long, cheap) wires to get a good old telephone line -- with no computers involved. Add in some hand cranks to also get the phones to ring.
When I was young, I used to have this with a friend who lived next door. It was amazing to have a free, private, always on hotline. If memory serves me right, it even worked for playing Starcraft over 56K baud modems!