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It will be cheaper to buy a ready made unit than to build one. Also equipment to be connected to the telephone network must be type approved. (At least that is the case in the UK) Here is one being sold on Ebay but there are many more.
Like Les said, there is a add on the company does to your line that allows caller ID, just having a phone or something with a read out doesn't automatically make it work, at least not here in the USA. Your country may be different though.
One has to pay extra for caller ID, it does not come by default in many areas (depends on carrier). Regardless, if you think it is included in your service, you are paying for it in the monthly fee anyway, hidden in the cost...
That really depends on the country. Here in Czechia (central europe...) caller ID on landlines is automatic for everyone since about 2005 I guess. Other places I am sure will differ, but when you as a provider got all digital POTS exchanges I don´t see why you would want to charge premium for something that doesn´t cost you a dime.
In Canada, Caller ID has a monthly fee and even Touch Tone on a landline also has a fee. For many years I refused to pay the Touch Tone fee So I dialed with rotary dial pulses (on my modern pushbutton phones) then switched to free Touch Tone for banking and for navigation.
I don't need Caller ID. I answer and swear at the guys with a strong accent and little girl's voice in a call center in Pakistan or India selling Duck Kleening.
Years ago the caller ID was included with our cable TV package. I see it on the phones as well as on the TV (when the TV is on). It's also standard on our cell phones. If the caller is not recognized they can leave a message. No message no call back. Anyway, depending on your location you should be able to just get a phone with a display for caller ID. I guess in some locations you pay more for the feature or service. I never gave it much thought. Additionally just like an email a caller ID can be spoofed which is why if I don't know you, leave a message.
Assuming you have multiple telephone providers? you'll probably find that some of them charge extra for caller ID, if you specifically want caller ID (and really who wouldn't?) then you need to make sure you pick one who provides it for free, or be prepared to pay for it.
The UK's largest telephone company BT, only made caller ID free last October (2018), because I added it for an elderly neighbour.
So how do you connect to the Internet? - assuming it's via cable?, why is that any different to a phone line?.
I moved my Internet to a wireless service a while back (as the phone connection was crap), and used a Voip phone service (which has free caller ID, and is basically 'pay as you go'). More recently I've moved back to a phone line, as FTTC became available, and while it's a long way to the cabinet and I don't get quite as high a speed as the wireless service, it's unlimited and slightly cheaper. It obviously comes with a phone connection, but I've never had a phone plugged in, and don't even know what the number is - I've simply continued using my Voip phone. If I need to ring my ISP for anything, I'll plug a phone in, as calls to the ISP are free from that number.
I guess in Canada you guys have fewer annoyance calls because Caller ID, while it is included in my land line and cell service I would gladly pay for. The elimination of annoyance calls alone makes it worth it down here.
The call centers in Pakistan and India "phish" local telephone numbers then caller display does not say they are on the other side of the world.
There is a second or two delay so it is obvious they are calling long distance.
A recent scam had people on the other side of the world pretending to be the Canadian Government saying that the person here answering owes taxes and must buy thousands of dollars of Gift Cards then calling them back with the refund numbers. Many gullible old people here did it.
Yes, the government is going to require payment in gift cards or Google Play cards. They also say you will be electronically tracked by your cell phone while you go to the closest store to purchase them.