n. (from coder and modem)

  1. A device that performs the function of a modem, only digitally.

As modem is short for modulator/demodulator, a “digital modem” is not really a modem at all: it doesn’t modulate an analog signal, but rather encodes and decodes a bitstream. Strictly speaking, the word analogous to modem would be codec, short for coder/decoder, but that word has a specific meaning in popular usage: the software “driver” for an audio or video file format.

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