Time Domain Reflectometers send a signal down the conductor and measure the time it takes for the signal -- or part of the signal -- to return. The signal's reflection begins at the flaw point. Once it returns, time is converted to distance, then divided by the speed of light, multiplied by the proper velocity of propagation (VOP), and the result is divided by two.

It is important to note that the final result does not describe the problem; it only tells the engineer where on the line to look for the problem.

Introduction to Time Domain Reflectometry
Tutorial explains principles behind time domain reflectometry and why it's gaining in popularity.