2.1 Modem Functions
2.1.1 Digital to analog conversion
Regular phone lines, also known as plain old telephone service (POTS), were designed to carry voice traffic and are analog by definition. On the other hand, computers are digital and communicate digitally. For example, in order for a small office to connect to a central site, the digital equipment needs to communicate over an analog connection. For this communication to occur, the digital signal needs to be converted into an analog tone. A modem performs this conversion.

A modem (modulator/demodulator) converts digital signals to analog, and vice versa. It converts digital to analog, only to be converted back to digital, as seen in Figure . Modems can achieve data rates ranging from 300 bps up to 56 Kbps. In order to achieve higher data rates, special conditions such as the presence of only one analog to digital conversion in the communication path must be adhered to. It is not uncommon for analog paths to introduce noise and reduce the data rates modems can achieve.

Universal Asynchronous Receiver/Transmitter
The transmission speed can also be limited by the Universal Asynchronous Receiver/Transmitter (UART) type of a workstation. The UART is a computer component that handles asynchronous serial communication. Every computer contains a UART to manage serial ports, such as those used for a mouse or an external modem. Every internal modem has its own UART.

Controlled by a clock usually running at 1.84 Mega-Hertz (MHz), UARTs have a maximum throughput of 115 Kbps. UARTs have a memory buffer to temporarily hold incoming data. This buffer varies by the model, but it is usually quite small.

Type of UARTs: 16C450
16450
16550 uses a 16-byte buffer
16550af
16750 uses a 64-byte transmit buffer and a 56-byte receive buffer

Data terminal equipment (DTE) are end devices such as PCs, workstations, and mainframe computers. End devices communicate with each other through data communications equipment (DCE) such as modems, channel service units (CSUs), and data service units (DSUs).

Figure , displays the DTE/DCE interface. DCE can also be expanded to mean data circuit-terminating equipment, which is the International Telecommunication Union Telecommunication Standardization Sector (ITU-TSS, or simply ITU-T), formerly known as CCITT. The Electronic Industries Association (EIA) defines the DCE acronym as data communications equipment. The EIA/TIA-232 standard defines the interface between DTE and DCE. TIA stands for Telecommunications Industries Association.

Note: The EIA/TIA-232-C (formerly known as RS-232-C) standard is the most commonly used asynchronous interface for data communications in North America. The RS-232 standard was first issued in 1962, and its third revision, RS-232-C, was issued in August 1969. Although the ubiquitous D-shaped 25-pin connector (DB-25) has become the market norm for EIA/TIA-232-C interfaces, it was not specified in the original RS-232-C standard. Many EIA/TIA-232-C devices use other connectors, such as the DB-9 or RJ-11/RJ-45 modular connectors. X.21 is a European standard that defines the DCE/DTE interface.