aw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. First Things First First Things First phony local loop is 8,000 baud. Yet, during the late 1980s and the early 1990s, it was common to see advertisements for 9,600 baud modems. This is where the confusion of terms becomes obvious: As it turns out, these were 9,600 bit-per-second modems-a big difference. Modems with 9,600 baud were patently impossible. This, however, introduces a whole new problem: How do we create higher bit rates over signaling rate- limited (and therefore bandwidth limited) channels? To achieve higher signaling rates, one of two things must be done: Either broaden the chan- nel, which is not always feasible, or figure out a way to have a single sig- naling event convey more than a single bit. It's time to introduce a new word: Baud. Baud is the signaling rate. It may or may not be the same as the bit rate, depending on the scheme being used. Consider the following example. We know from our earlier discussion that we can represent two bits by sending a high-amplitude signal fol- lowed by a low-amplitude signal (high-amplitude signal represents a zero, low-amplitude signal represents a one). What would happen though, if we were to combine amplitude modulation with frequency modulation? Consider the four waveforms shown in Figure 1-22. By com- bining the two possible values of each characteristic (high or low, fre- quency or amplitude), we create four possible states, each of which can actually represent two bits as shown in Figure 1-23. We can have a high- bandwidth, high-frequency signal; a high-bandwidth, low-frequency sig- nal; a low-bandwidth, low-frequency signal; and a low-bandwidth, high-frequency signal. Consider what we have just done: We have cre- ated a system in which each signaling event represents two bits, which means that our bit rate is twice our signaling rate. Let's take our concept one step farther. Figure 1-24 shows a system in which we are encoding four bits for each signa