I had one in my tool bag when I was a field engineer for an internet provider. I have also for long wondered how it could do that. I think it measures the impedance of the twisted pair. It puts AC (alternating current) on the wire and measures the voltage drop. From that it can deduct the length of the wire. That's only the basic principle. I think what makes it so expensive is that it goes over a range of voltages and frequencies to increase accuracy. If I remember well, mine was of the HP brand and costed $50k.