The current is used for the carbon mike and to tell
the
phone system that the phone is off the hook. Line connected
modems don't have any use for the current and only have
a load resistor there to keep the line connected.
Something I forgot about earlier :
I think the GPO Modem 13A (A plinth mounted under a normal dial-type
phone) could be strapped to draw its power from the line. I don't know
the full deatails, I do have one of these modems (300 baud CCITT
oriignate only), but I have no diagrams other than the connection lable
stuck inside. But there's certainly a transformer-isolated PSU circuit on
the board, and one setting of the straps seems to connect the input of
this to the line
-tony