Modems
A modem is a device that converts digital data originating from a terminal or computer, to analog signals used by voice communication networks such as the telephone system. At one end, modems convert the digital pulses to audible tones and convert audio tones back to digital pulses at the other.
The word "Modem" stands for "
MOdulator-
DEModulator".
Illustration of a Modem

Modem Characteristics
Transmission speed
Modems are available in different transmission speeds, which are measured in BPS (bits per second) also called BAUD rate. Standard modems speeds: 9600 baud, 14400 baud, 28800 baud, 33600 baud, 56800 baud.
Internal/External
Internal modems are electronic cards. An internal modem is installed in one of the computer's expansion slots either PCI or the older ISA card slots.
External modems are fully functioning external devices. The external modem is connected to a computer using a serial cable to one of the computer's serial ports, and draws power from an external power source or connected via a USB cable and USB port and are usually self powered.
Error detection and correction
Nowadays most of the modems support advanced error detection protocols at the hardware level. Detection and correction is achieved using such protocols as:
MNP (Microcom Networking Protocol) - a protocol developed by Microcom for full-duplex, error free communication. MNP was developed to detect, and correct, errors resulting from noisy telephone connections, and have five variants.
ITU-T (The International Telecommunication Union) is a home for various other protocols, known for their names which start with a V (otherwise known as the V-Dot Standards).
Compression
Due to the the low transmission speeds achieved by modems, most modems support a variety of data compression protocols. Using these protocols, the data throughput can rise by an average of 50%. MNP-5: Maximizes data transfer rates, and provides compression.
V.42bis: An extension to V.42 that includes data compression. Also supports MNP-5.
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