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Modem

The modem is provided by your ISP to connect your home computer/network to their network usually at a cost of $2 (or more) a month. Alternatively, you may purchase a modem yourself if do not wish to pay that monthly rental surcharge.

The modem itself has another DHCP service. The reason being, the modem is allocated only one IP address at any time, and if you need to connect more than one computer to the public Internet, the modem would have to concoct IP addresses for more than one computers and translate the concocted addresses.

In effect, the DHCP in the modem helps in creating a LAN at your home (or office) by automatic assignment of LAN IP addresses to more than one computer. However, the modem needs to work with a router to create a LAN.

The modem would also provide NAT (network address translation) to translate the addresses it has concocted for the LAN to be able to them to communicate with the public internet.

Older modems may not provide DHCP and, therefore, have no NAT feature. For such cases, you would definitely require a router.


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