By converting punched cards to 5-level paper tape you could send the
data over ordinary telegraph circuits and equipment, including the
Bell System TWX service. These circuits might be just wires, or
telegraph carrier channels, or they might include regenerative
repeaters for the 5-unit code. There were also private systems for
transmitting 5-level code within a company or organization - these
were supplied by Bell or by Western Union.
The Bell System didn't allow any "foreign" (meaning customer-provided
equipment) attached to the switched network. They vigorously defended
this position until it was overturned by the Carterfone case. If you
wanted to use customer-provided equipment you had to lease a private
line. You could lease a telegraph-grade line or a voice grade line
which cost a lot more. So the IBM card-to-card transceiver came in a
DC model that would work slowly over a telegraph line, and in an AC
model that would work faster over a voice grade line. And since it
did not need the entire bandwidth of a voice-grade line IBM designed
the modem with four different frequency bands so that up to four
systems could operate simultaneously over a voice-grade line.
The earliest modems were not really called that but were the carrier
systems installed in telephone and telegraph company offices to allow
multiple telegraph transmissions over a single voice-grade circuit.
The cusotmer usually didn't know or care whether his leased line was
wire from end to end or was transmitted over a telegraph carrier
channel.
Modems, in the form of carrier channel terminals packaged to be self-
contained, were sometimes used in manual TWX service to connect the
teletypewriter on the customer's premises to the TWX central office.
In the late 1950s the Bell System deployed a message switching system
for Delta Airlines. This used the voice telephone switched network to
connect stations to each other. A cabinet of equipment about four
feet high contained a model and an auto-dialer which went between the
telephone line and the very complicated Teletype set used to transmit
messages and dial numbers automatically. About the same time Bell
provided a voice-grade private line and high speed (1200 baud) modems,
called "digital subsets", to the FAA for transmitting weather data
around the U.S. on a private leased voice grade line. Also at that
time you could buy third-party modems operating to 2400 baud or so to
use on private lines.
Then in the early 1960s the Bell System opened things up by leasing
modems that allowed the customer to connect business machines to the
modem and transmit data over the switched network. The EIA RS-232
standard interface soon followed. In the same time frame they
converted TWX to a dial service, operating mostly over the voice
switched network. Some other services were proposed, including a Wide
Area Data Service, but these were shot down by the FCC. --
jhhaynes at earthlink dot net