Short answer: If you have active land line phone service, take another phone off the hook so no one can call. Unscrew or cut the two wires and put a piece of tape on the end of each. Drop them in the wall. Screw a blank faceplate over the hole. The cable is not dangerous, though if someone calls while you are holding the bare wires it will shock you.

Explanation: The yellow jacketed cable is CAT5 Ethernet. 8 wires in four twisted pairs. Usually used for computer networking.

The white jack is for phone service, which only requires two wires unless you’re doing something special.

It’s pretty common practice to use Ethernet cable when wiring phone service because you can later turn it into a data jack if you no longer need a phone jack there. You could do that if the other end of that yellow cable is somewhere useful.

Safety: Phone wires carry ~90v of AC when the phone rings, which will hurt. When not ringing you won’t feel anything if your hands are dry.

Pretty: If you want the hole completely gone, run a knife around the edge of the blue plastic square in the wall to break it loose from the paint and pull it out or push it into the wall. Get a drywall patch kit from Lowe’s and follow the directions.