Nearly all modems now include some sort of fax capability and usually come with bundled software which provides a PC with most of the functionality of a fax machine. Digital documents can be converted to analogue, ending up as an image file (if the receiver is another fax/modem), or a printed document (if received by a facsimile machine). Incoming faxes received as image files are saved to the PC’s hard disk.

Fax-modems exploit the intelligence of the PC at their disposal to do things standalone fax machines can’t. For instance, faxes can be scheduled to be sent when the phone rates are cheaper. Also, since the data they receive is in digital form, it is immediately available on the PC for editing or retouching before printing. One of the common features in fax software is a cover-sheet facility which allows the definition of a fax cover-sheet. There’s often a quick-fax facility, too, which allows a single page fax to be created without the hassle of loading a word processor.

Group 3 fax/modems provide various levels of processing based upon their service class. Class 1 devices perform basic handshaking and data conversion and are the most flexible, because much of the work is done by the computer’s CPU. Class 2 devices establish and end the call and perform error checking. There are a variety of de facto Class 2 implementations and one Class 2.0 standard. As PCs have become more powerful, future service classes with more features are unlikely.

One problem with scanned images and received faxes is that they hog large amounts of disk space. Some bundled fax software includes an optical character recognition facility (OCR) which allows received faxes or scanned images to be converted from bitmap format to normal text. This not only reduces document sizes but also allows them to be edited in a word processor.

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