In a packet data communications system (100) where a customer premises (120) has only a packet-based connection, a proxy modem (200) is provided at the customer premises to connect to devices that send and receive modulated transmissions, e.g., facsimile, modem, and TDD/TTY. The proxy modem demodulates the modulated transmissions (208), organizes the resulting digital signal into a packet (210) and forwards the packet over a packet network (104, 106). Another proxy modem (200) that connects to the packet network and to a telephony network (110) receives the packets from the packet network. The packets are re-organized into a digital signal that is then modulated and forwarded over the telephony network to a destination. Use of the proxy modems in the network prevents unnecessary digitizing of modulated transmissions, which slows transmission and introduces errors.