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A cable modem is a device that modulates and demodulates an analog carrier signal to encode and decode digital information that is transmitted, providing bi-directional data communication via radio frequency channels using hybrid fibre-coaxial cable (HFC cable) and radio frequency over glass (RFoG) architecture. This cable and architecture provide the high bandwidth required for Internet access.
A cable modem provides a bridge between a customer's LAN and the coaxial cable network of the ISP. In other words, it functions as a bridge as well as a modem.
The cable modem is necessarily complex in order to function in both these capacities. It operates both in the physical layer (1) and the data link layer (2) with respect to the OSI model of network design, in addition to having functionalities at other layers. The cable modem has its own IP address as a network node and therefore operates in the network layer (3), and it supports protocols in the transport layer (4) and the application layer (7).
A cable modem may also incorporate a router, which is typically kept functionally separate, within the same housing. The router is sometimes called a residential gateway. Both the cable modem and the router have their own IP address and MAC address to identify each component through their interfaces on the LAN and the WAN.