A communications system includes an internet protocol network, a calling modem and an answering modem configured to effectively handle network latency. The calling modem includes a timer storing a network latency value. The network latency value is compared to a network latency threshold. If the network latency threshold is less than the network latency value, then a high speed modem connection is continued. If the network latency value is greater than the network latency threshold, then the high speed modem connection is terminated. In place of the high speed modem connection, a low speed modem connection is established. The calling modem is operable to transmit a modem connection selection signal for selecting a high speed modem connection or a low speed modem connection. The answering modem is operable to receive the modem connection selection signal.