Abstract: A modem is disclosed having a data transmission protocol involving lower-speed, full-duplex operation during the connect sequence with a remote modem and an automatic switch to higher-speed, half-duplex operation for data transfer. Further, the modem data transmission involves transparently changing between lower-speed, interactive operation and higher-speed operation based upon data transmission demands. The operation is controlled by a processor monitoring the contents of a transmit data buffer and providing a mode control command to the modem transmitter. The modem also adapts its speed to the quality of the telephone line by fallback or fallforward to a different speed based upon predetermined data frame retransmission criteria.