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A local-area network (LAN) connects computers at a single site using high-speed coaxial cables or optical fibers. Data can be exchanged between computers on a LAN at 10 or 100 kilobits per second (kbps). This value is termed the ``bandwidth''. A wide-area network (WAN) connects computers at two sites in different regions or even different countries by transmitting data over a ``point-to-point'' link. A link is usually established over analog or digital telephone lines and, for worldwide connections, data may be relayed via communications satellites. A point-to-point link can also be established over a dedicated serial line if the hardware at each end is capable of maintaining sufficient signal strength over the distance between the systems.
Analog transmission requires the use of a modem to convert or ``modulate'' digital data into an analog audio form so it can be sent over a telephone line, and another modem at the receiving end to convert or ``demodulate'' the analog signal back into digital data. The bandwidth of an analog telephone line is usually 3000Hz (3000 cycles per second) but sophisticated encoding and compression techniques allow the transmission of data at up to 56.6kbps over suitably noise-free lines.
Digital transmission over ISDN (integrated services digital network) lines uses modulation and demodulation techniques to transmit and receive both data and audio signals in a form that can be processed digitally. The available bandwidth, 64kbps per B channel of a basic rate interface (BRI) ISDN terminal adapter, is higher than for an analog line.
WAN connections over leased wideband or nonswitched digital ISDN lines can match the bandwidth of a LAN. However, no technology, whether analog or digital, can overcome the noticeable time lag (or ``latency'') that the speed of light imposes on long-distance communication. If the round-trip distance between sites connected by satellite is 150,000 kilometers, there will always be an inevitable delay of at least a half second in receiving a response to a transmission.