Modem is an abbreviation for Modulator Demodulator. A modem converts data from digital computer signals to analog signals that can be sent over a phone line (modulation). The analog signals are then converted back into digital data by the receiving modem (demodulation). A modem is given digital information in the form of ones and zeros by the computer. The modem converts it to analog signals and sends over the phone line. Another modem then receives these signals, converts them back into digital data and sends the data to the receiving computer.

The actual process is much more complicated then it seems. Here we discuss some internal functions of modem that helps in the modulation and demodulation process.

1. Data Compression
Computers are capable of transmitting information to modems much faster than the modems are able to transmit the same information over a phone line. However, in order to transmit data at a speed greater than 600 bits per second (bps), it is necessary for modems to collect bits of information together and transmit them via a more complicated sound. This allows the transmission of many bits of data at the same time. This gives the modem time to group bits together and apply compression algorithms to them. Modem compresses them and sends over.

2. Error Correction
Error correction is the method by which modems verify if the information sent to them has been undamaged during the transfer. Error correcting modems break up information into small packets, called frames and send over after adding a checksum to each of these frames. The receiving modem checks whether the checksum matches the information sent. If not, the entire frame is resent. Though error correction data transfer integrity is preserved.

3. Flow Control
If one modem in a dial up connection is capable of sending data much faster than the other can receive then flow control allows the receiving modem to tell the other to pause while it catches up. Flow control exists as either software or hardware flow control. With software flow control, when a modem needs to tell the other to pause, it sends a certain character signaling pause. When it is ready to resume, it sends a different character.
Since software flow control regulates transmissions by sending certain characters, line noise could generate the character commanding a pause, thus hanging the transfer until the proper character is sent. Hardware flow control uses wires in the modem cable. This is faster and much more reliable than software flow control.

4. Data Buffering
Data buffering is done using a UART. A UART (Universal Asynchronous Receiver/Transmitters) is an integrated circuit that converts parallel input into serial output. UART is used by computers to send information to a serial device such as a modem. The computer communicates with the serial device by writing in the UART's registers. UARTs have buffers through which this communication occurs on First in First out basis. It means that the first data to enter the buffer is the first to leave. Without the FIFO, information would be scrambled when sent by a modem. This basically helps the CPU to catch up if it has been busy dealing with other tasks.

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