It is mentioned on the website of ptcl that DSL will not work if phone line goes down. DSL service is dependent on the functional connection and quality of copper phone line. I want to use package with 4 mb speed or 8 mb. How can I know that my connection and my phone line is of good quality and I can avail high speed internet. What is fibre optic?
Check the stats page of your modem and check the table provided on this page that explains in detail about SNR Margin and Line Attenuation.
You can compare what your line's stats are and what is the maximum speed your line would support by comparing the SNR Margin and Line Attenuation.
Coming to your point about telephone line going down: Your adsl link and telephone works at different frequencies and at a given time your adsl link could go down and phone may still work and on the other hand it is also possible for the adsl link to be working fine and your phone may be dead and you cannot make or recieve any phone calls.
For the package you want to use you could go for the 8Mbps connection that Ptcl is offering with no FUP till the end of this year and there will be a FUP after 31st of Dec 2014 and you would get data transfer of 100GB ( I might be wrong on this) that would be included in your subscription and after that you probably start getting billed per MB/GB whatever the policy be for this plan.
Fiber optic is the name of the cable that is used in place of copper to provide high speed broadband connections. An 8mbps connection does not really need a fiber optic cable as adsl 2+ is capable of pushing a lot more then 8mbps using copper cable itself. Fiber optic has the advantage that connection quality does not deteriorate as the distance increases where as after 2 kilometres a copper line using adsl 2+ technology will keep dipping and will loose a lot of bandwidth by the time it goes beyond 4-5 kilometres. Copper works best under 2 Kilometres. This is why the distance of your house from the PTCL exchange dictates what max speed you can get.
I hope this helps.