Ex-navy electrician here. They use a microphone transducer to convert sound pressure from your voice into electric current. They convert it back to sound by a transducer at the receiver node. The Navy still uses it because it doesn’t require any outside electricity which is prefect for emergencies.
Fun fact, one of the things we’d do to haze new recruits is to send them to the ICmen to ask for a sound powered telephone battery.
That particular shot is from Portlandia where he played the mayor.