Abstract: A system for ensuring optimum performance of a modem used in conjunction with a telephone system employing a digital PBX coupled with a two-wire analog trunk includes an echo cancellation circuit having an adaptive filter connected in series circuit with a linear codec between the digital PBX and a two-to-four wire hybrid converter coupled with the two-wire analog telephone trunk. The combination of the echo canceller and the linear codec allows accurate decoding of weak far end modem signals when such signals are summed with a strong near end modem signal echo. The DSP echo canceller removes the very strong near end modem echo and passes the far end modem signal with little distortion, while the linear codec permits accurate recovery of the weak far end signal in the presence of high noise levels.