If you are running telephone and ethernet on the same cable then it is most likely interference from the telephone pair. POTS (Plain Old Telephone Sockets) have a constant voltage of 50V and ring at 75V with an engaged voltage of 35V.
It will not be the electrical 110V causing interference because your switch cancels the noise out because it if grounded(negative) to your home installation(on which your switch runs and knows about this frequency so it can eliminate is successfully).
Why will it pick up noise from the telephone voltage? Because the power is coming from outside your house on a separate ground loop that has a unique frequency resonance which is not the same as your houses' frequency(not talking about 50hz/60hz - But electromagnetic radiation). This will cause the switch to suffer packet loss because it cannot successfully XOR noise that is generated from the phone lines voltage frequency.
To solve this problem in order of cheapest to most expensive:
- Do not run the phone line on the same cable as Ethernet.
- Buy a VoiP router like Linksys SPA family and plug your phone line in there and route all traffic via ether to IP phones.(But also you can then run the phone out from the SPA because it is grounded at your home and you are within the loop)
Please Note:
Some distribution boxes have a lightning protector or surge protector installed that link in the actual earth(also called ground) but earth is used in UK, Some parts of EU and ZA(not sure about USA) to detect appliance fault and gives lightning a short path to the earth. Usually the earth bar is connected to a rod that goes into the ground outside the house or bound to the incoming phase shield which is earthed at the main power box. When I talk about ground I mean the actual negative(-) wire of an appliance or analog / digital circuit.
NEVER TRY TO GROUND(NEGATIVE) THE TELEPHONE TO YOUR HOME GROUND OR A GROUND LOOP ISOLATOR
As it seems the OP grounded his telephone but it is most likely earthing the cable not actual negative.
Doing this can cause damage to the telephone network costing you thousands dollars and/or cause death or serious bodily injury from electrical shock. Remember that the ground of your home has a different impedance than ground from the telephone network and can result in 110V electrical shock! That is why it is illegal to rewire telephone sockets in many countries. For your own safety.
Best Answer
MoCA might be a solution for you (Media over Cable Alliance). I note that you have quite a few coax cables in your LV box, does one of them go to near the spot you want? If so, you can get MoCA adapters to repurpose the coax for use with ethernet. You'll have to do some research, but this should point you in the right direction. Here is a place to start: https://www.signalbooster.com/blogs/news/moca
Disclaimer: I have no personal experience with it, but it seems pretty well represented out there, your mileage may vary. Maybe others here can comment on experience with MoCA.
EDIT: This may be a question better asked at another part of SE: More to do with computers and networking. You are going to have other configuration issues such as DHCP controls using a 2nd router. Why keep it? Do you have enough ports on the new router? If so, just use the MoCA adapters (if your coax runs to a desired place) and plug it in. If not enough ports, just add a simple (non-intelligent) switch to add ports. Multiple routers can be a head ache if you aren't an expert, switches will often do the job.
Thoughts from other about migrating this question?