Modem (from modulator-demodulator) is a device that modulates an analog carrier signal to encode digital information, and also demodulates such a carrier signal to decode the transmitted information. The goal is to produce a signal that can be transmitted easily and decoded to reproduce the original digital data. Modems can be used over any means of transmitting analog signals, from driven diodes to radio.

The most familiar example is a voiceband modem that turns the digital 1s and 0s of a personal computer into sounds that can be transmitted over the telephone lines of Plain Old Telephone Systems (POTS), and once received on the other side, converts those 1s and 0s back into a form used by a USB, Ethernet, serial, or network connection. Modems are generally classified by the amount of data they can send in a given time, normally measured in bits per second, or "bps". They can also be classified by Baud, the number of times the modem changes its signal state per second.

Baud is NOT the modem's speed. The baud rate varies, depending on the modulation technique used. Original Bell 103 modems used a modulation technique that saw a change in state 300 times per second. They transmitted 1 bit for every baud, and so a 300 bit/s modem was also a 300-baud modem. However, casual computerists confused the two. A 300 bit/s modem is the only modem whose bit rate matches the baud rate. A 2400 bit/s modem changes state 600 times per second, but due to the fact that it transmits 4 bits for each baud, 2400 bits are transmitted by 600 baud, or changes in states.

Faster modems are used by Internet users every day, notably cable modems and ADSL modems. In telecommunications, "radio modems" transmit repeating frames of data at very high data rates over microwave radio links. Some microwave modems transmit more than a hundred million bits per second. Optical modems transmit data over optical fibers. Most intercontinental data links now use optical modems transmitting over undersea optical fibers. Optical modems routinely have data rates in excess of a billion (1x10⁹) bits per second. One kilobit per second (kbit/s or kb/s or kbps) as used in this article means 1000 bits per second and not 1024 bits per second. For example, a 56k modem can transfer data at up to 56,000 bits per second over the phone line.

History

News wire services in the 1920s used multiplex equipment that met the definition, but the modem function was incidental to the multiplexing function, so they are not commonly included in the history of modems. George Stibitz connected a New Hampshire teletype to a computer in New York City by phone lines in 1940. Modems in the United States were part of the SAGE air-defense system in the 1950s, connecting terminals at various airbases, radar sites, and command-and-control centers to the SAGE director centers scattered around the U.S. and Canada. SAGE ran on dedicated communications lines, but the devices at each end were otherwise similar in concept to today's modems.