What's the Difference Between Modem and Router Functions?

By: Jesslyn Shields  | 
Years ago, setting up home internet required a modem and a separate router. Nowadays, there are multiple modem-router combos on the market. alxpin / Getty Images

If you're reading this online — and how else could you be reading it? — you're very likely relying on two essential but easily confused devices: the modem and the router. Without them, most people's internet access wouldn't be possible.

But their particular functions aren't identical, which leads many to wonder about the difference between modem and router functionality.


In order for that sweet WiFi to flow unobstructed into and throughout your home, both the modem and the router must be working. Sometimes they can be combined into one box, but even so, it's still two different technologies working inside of a single housing.

What Is a Modem?

The modem is the device that brings the internet into your home by sending and receiving data. It's essentially a box with two ports: a port that connects it to the internet, and the port that connects it to either a computer or a router (the latter will usually fit an ethernet cable).

In the simplest terms, a modem connects a digital device to the internet, acting as a kind of hub between the internet signal coming through the cable, fiber line or phone line, and your computer or smart devices.


If you look at your internet bill, you might find you're paying a fee every month to rent a modem from your internet service provider (ISP). However, you can usually save a little money and buy your own modem for the price of less than a year of your rental.

Modems: A Brief History

In the very early days of the internet the best and only option for the average person's internet connection was through analog phone lines. Multiple devices on a home network were hardly more than a distant dream, and wireless devices usually referred to large, clunky radios.

To get through to your internet service provider, you connected your modem to an old fashioned phone line, which was designed to transmit analog signals. This was fine for voices, but computers don't have voices (or they didn't back then, anyway), they have binary code, and so a transformation was needed.


The earliest modems had to modulate and demodulate electrical signals — that's actually where the word comes from, by shortening and combining "modulate" and "demodulate."

Things have come a long way since then. Now, pretty much everything is faster, stronger, better and fully digital. There are also more options for modern modems.


What Is DSL?

One of the first improvements on the modem technology of old was DSL, which stands for digital subscriber line. A DSL modem requires the same analog phone lines that used to be standard for telephones but utilizes a different part of the spectrum of the signal.

This innovation allowed digital signals to be used, which greatly improved the speed and reliability of people's internet connection.


For a while, DSL seemed like the future, although it was fairly rapidly surpassed in terms of performance by newer technology. Still, in areas where cable, satellite and fiber are harder to come by, it remains an option.

What Is a Cable Modem?

A cable modem permits a high-speed internet connection over same kind of coaxial cable that cable TV uses. This option is popular today and is the current standard of internet service for most people. With the data speeds available on a cable modem, the local area network needed for multiple devices becomes a lot easier to manage.

A cable modem usually has one coaxial port, a power cord port and an Ethernet port. The cases tend to have venting for cooling purposes, and small lights that indicate a live internet connection. Sometimes, they will come with an Ethernet cable to connect to your router.


What Is Fiber Internet?

Fiber internet, which is a slight shortening of fiber optic internet, uses a series of very fine strands of glass or plastic to transmit digital signals at dizzying speeds. Technically, a fiber internet connection uses what's called an Optical Network Terminal (ONT), which is the fiber equivalent of a modem.

Like other modems, it assigns your home network the ISP (internet service protocol) allowing the devices to have local IP addresses. This permits them to talk to each other and connect to the internet.


What Is a Router?

A router connects to the modem and allows different wired and wireless devices to connected to the internet. So, if you just have a modem, you can plug it in to your laptop and have internet access on that one computer.

But if you have a router, you can create a "home network," also known as a "local area network" or LAN, with the router acting as the distributor of the internet signal to the various parts of your home, as well as a translator so your wireless devices can read the signals from the modem.


The router also acts as a traffic cop, preventing congestion of the internet signal. It's much better at this when there are fewer devices working off a single router.

The router size you need depends largely on the size of your home or business. If your space is really large, you can buy a router with several little satellite routers that can help the signal leapfrog around your home.


What Is a Gateway?

Basically, a gateway device combines the modem and router into a single module. There isn't anything all that fancy about gateway devices, despite the name. They contain and integrate both functions into one box, with one power cord.

While the combination has its appeal (why bother with two separate devices when you can have one?), it comes with a basic disadvantage.


Modem technology develops slowly, whereas routers change at a more rapid pace. So it's likely that, if and when you want to upgrade, the modem in your gateway will be fine, while the router is out of date. Most experts recommend keeping a separate modem and router for this very reason.