Starting in the bottom right-hand corner, data leaves the PC as bits that are converted into sounds by the modem. We now have data encapsulated in sounds.

These sounds cross the PSTN network until they are encapsulated inside a bit stream by the CODEC at the boundary between the ISDN and the PSTN. This bit stream is then passed from the ISDN network to the Terminal Adapter, which contains a CODEC that converts the bit stream back into sounds. These sounds are sent to the modem at the top left, which converts this back into the original data that entered the modem at the bottom left.