Baud vs. Bits per Second

The baud unit is named after Jean Maurice Emile Baudot, an officer in the French Telegraph Service. He is credited with devising the first uniform-length 5-bit code for characters of the alphabet in the late 19th century. What baud really refers to is modulation rate or the number of times per second that a line changes state. This is not always the same as bits per second (BPS). If you connect two serial devices together using direct cables then baud and BPS are in fact the same. Thus, if you are running at 19200 BPS, then the line is also changing states 19200 times per second. But when considering modems, this isn't the case.

Because modems transfer signals over a telephone line, the baud rate is actually limited to a maximum of 2400 baud. This is a physical restriction of the lines provided by the phone company. The increased data throughput achieved with 9600 or higher baud modems is accomplished by using sophisticated phase modulation, and data compression techniques.