A modem is a device that allows two computers to communicate over a standard phone line. The receiving modem will then change the sent tones back to digital information, which can be understood by the receiving computer. This process gives the modem its name, derived from the two words mo dulate and dem odulate , which accurately describe the two primary functions of a modem. The other type of modem, an external modem, is kept outside the computer.
Internal modems are usually less expensive than their external counterparts.
This is because external modems are both easier to install and more mobile. Obviously, the more bits that can be transfered over a given amount of time, the faster the transfer of information will be. Another term which is used to describe the speed of a modem is baud rate , which doesn't technically mean the same thing as bits per second. Since the average computer user is not concerned with the subtle differences in these definitions, the two words are often used interchangeably. Obviously, the faster the modem, the more expensive it will be.