A PSTN call travels as unencrypted pulse code modulation, so it is readable by anyone with access to the copper pair, the switch that serves it, or the gateway where the call enters the circuit-switched network, and US carriers are required by 47 U.
The devices most likely to fail are the analog endpoints that dial out over a copper line and rely on its steady electrical signaling: fire alarm panel communicators, elevator emergency phones, security and burglar alarm dialers, medical alert pendants, and the fax machines and card-payment terminals that talk through analog modems.
A PSTN gateway is a device that converts telephone calls between the circuit-switched public telephone network and a packet-based IP network, so analog phones, fax machines, or a legacy PBX can work with a VoIP system.
The difference is one of scope: the public switched telephone network, or PSTN, is the entire interconnected system of operator-run telephone networks, while plain old telephone service, or POTS, is the basic analog voice service delivered to a subscriber over that system.
The PSTN works by circuit switching: for each call it builds a dedicated end-to-end path between two phones and holds that path open until someone hangs up.
The public switched telephone network, or PSTN, is the aggregate of the world's interconnected, operator-run telephone networks, and it has carried ordinary landline calls for well over a century.