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Quoted from a public message from Grant DeLorean 26 Feb 1990.

                         Baud != BPS
                        -------------

The word Baud has a specific meaning, and that meaning is discrete signal
events per second. The term bits per second (BPS) is similar, it means the
number of data bits transmitted per second. The two terms, while similar,
are not synonymous. It is possible to transmit more than one data bit
per Baud, and that is the way modern modems get the throughputs they
achieve. In the modems that have seen common useage, the only rate at
which the BPS and Baud rates have matched has been 300 Baud (there were
some 450 Baud modems, but they weren't very common).

Today's dial up telephone lines have an average of 3000 Hz bandwidth
available (can be as low as 2400 Hz or as high as 3400, but the average is
around 3000). Modems (shorthand for MOdulator/DEModulator) use this
to their advantage by encoding (modulating) a signal and sending it along
the phone line to a modem on the other side (which must be able to use the
same modulation technique) which will then demodulate it and pass it along
to its host system. Most modems are capable of sending and recieving at the
same time because they split the line into two channels. A short explaination 
of the commonly used modulation techniques follows:

300: This differs from the rest of the common modualtion techniques in that
only one data bit per Baud is sent. It uses the bandwidth in a slightly
different way than the rest. It uses a techniques called Frequency Shift
Keying. In FSK, different frequencies determine of any bit is 'on' or 'off'
(mark or space in the terminology of FSK). There are two 300 Baud standards,
Bell 103 (Bell Labs) and CCITT V.21. The Bell 103 is the more commonly used
standard, V.21 is optional although most good modems also support it. In
Bell 103, the originating modem uses 2225 Hz as mark and 2025 Hz as space,
the answering modem uses 1270Hz for Mark and 1070 Hz for space. CCITT V.21
the originating modem uses 1650 Hz Mark, 1850 Hz space and answering uses
980 Hz mark, 1180 space.

1200: At 1200 BPS things become slightly complicated. We are now sending
600 baud, but we are moving two data bits per baud to achieve 1200 bps.
This is accomplished by using Differential Phase Shift Keying, which is
difficult to explain without getting into wave form theory (which is
beyond the scope of this document). DPSK takes advantage of known waveform
behaviour to move two data bits per discrete signal event. The bandwidth
is divided into a 2400 Hz channel and a 1200 Hz channel (the originator
gets the wider path). The common standard used for 1200 BPS is Bell 212a,
though CCITT V.22 is an option.

2400: At 2400 BPS we are still using 600 baud, and the bandwidth is split
the same way as in 1200 BPS communications. This time we are using a
technique known as Quadrature Amplitude Modulation (same problem with
explaining as DPSK, waveform theory) to move 4 data bits (a "quad-bit",
as they are called "di-bit" for 1200) per discrete signal event. The
common standard here is V.22bis (not just V.22, which is a 1200 bps
modulation technique). 

9600 (V.32): V.32 uses a split of 1800 Hz for both channels. This does
cause problems with cross talk between the two channels, so echo
cancelation techniques are used to eliminate the problem. Each channel
sends at 2400 Baud. Trellis Coded Modulation encodes 5 data bits per
Baud (4 data, one parity), achieving 9600 bps throughput.

9600 (HST): The original HST split the bandwidth into an 1800 Hz forward
channel and a 350 Hz backchannel. It sent at 300 Baud on the back channel
and 2400 Baud using TCM on the forward channel to achieve 9600 BPS through-
put.

9600 (HST): The second HST raised the back channel to 375 hz and sent at
450 Baud along it, otherwise it was the same as the original HST.
14400 (HST): The 14400 HST uses the same channels as the 450 back channel
HST. It uses a modification of TCM to send 6 bits per Baud (12000 bps)
or 7 bits per Baud (14400).

The addition of such as MNP levels 1-4 and V.42 can change the actual
throughput, either a slight decrease or a slight increase will be seen.
The advantage is that the data received will have a better chance of
being good. MNP level 5, 7 or 9 and V.42bis can greatly improve the
throughput. If there is a demand, a more full explaination of MNP and
V.42 will be added here...