Penguin
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Modem is an abbreviation of Modulator/Demodulator, a device used to transmit data via phone line.

The name stems from the fact that it modulates an audio signal according to the stream of bits sent to it by a computer so that it can be sent across a phone line. Meanwhile, it detects modulation of the incoming signal to reconstruct the original stream of bits it was made from, which is then sent to the computer. Thus, you can network two computers with MoDems via a phone connection.

AddToMe: does this still apply to CableModem?s?

Most modern modems are only part modems, relying on the CPU to do much of the processing work. This requires the appropriate driver and can be a source of trouble for Linux users if the modem manufacturer doesn't release a driver for Linux. This type of modem is termed a WinModem.