We'll use 300-bps modems as a starting point because they are extremely easy to understand. A 300-bps modem is a device that uses frequency shift keying (FSK) to transmit digital information over a telephone line. In frequency shift keying, a different tone (frequency) is used for the different bits (see How Guitars Work for a discussion of tones and frequencies).
When a terminal's modem dials a computer's modem, the terminal's modem is called the originate modem. It transmits a 1,070-hertz tone for a 0 and a 1,270-hertz tone for a 1. The computer's modem is called the answer modem, and it transmits a 2,025-hertz tone for a 0 and a 2,225-hertz tone for a 1. Because the originate and answer modems transmit different tones, they can use the line simultaneously. This is known as full-duplex operation. Modems that can transmit in only one direction at a time are known as half-duplex modems, and they are rare.
Let's say that two 300-bps modems are connected, and the user at the terminal types the letter "a." The ASCII code for this letter is 97 decimal or 01100001 binary (see How Bits and Bytes Work for details on binary). A device inside the terminal called a UART (universal asynchronous receiver/transmitter) converts the byte into its bits and sends them out one at a time through the terminal's RS-232 port (also known as a serial port). The terminal's modem is connected to the RS-232 port, so it receives the bits one at a time and its job is to send them over the phone line.