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Currently, most ADSL communication is full-duplex. Full-duplex ADSL communication is usually achieved on a wire pair by either frequency-division duplex (FDD), echo-cancelling duplex (ECD), or time-division duplexing (TDD). FDD uses two separate frequency bands, referred to as the upstream and downstream bands. The upstream band is used for communication from the end user to the telephone central office. The downstream band is used for communicating from the central office to the end user.

Frequency plan for ADSL. The red area is the frequency range used by normal voice telephony (PSTN), the green (upstream) and blue (downstream) areas are used for ADSL.

With standard ADSL (annex A), the band from 25.875 kHz to 138 kHz is used for upstream communication, while 138 kHz – 1104 kHz is used for downstream communication. Each of these is further divided into smaller frequency channels of 4.3125 kHz. These frequency channels are sometimes termed bins. During initial training, the ADSL modem tests each of the bins to establish the signal-to-noise ratio at each bin's frequency. The distance from the telephone exchange and the characteristics of the cable mean that some frequencies may not propagate well, and noise on the copper wire, interference from AM radio stations and local interference and electrical noise at the customer end mean that relatively high levels of noise are present at some frequencies, so considering both effects the signal-to-noise ratio in some bins (at some frequencies) may be good or completely inadequate. A bad signal-to-noise ratio measured at certain frequencies will mean that those bins will not be used, resulting in a reduced maximum link capacity but with an otherwise functional ADSL connection.

The DSL modem will make a plan on how to exploit each of the bins sometimes termed "bits per bin" allocation. Those bins that have a good signal-to-noise ratio (SNR) will be chosen to transmit signals chosen from a greater number of possible encoded values (this range of possibilities equating to more bits of data sent) in each main clock cycle. The number of possibilities must not be so large that the receiver might mishear which one was intended in the presence of noise. Noisy bins may only be required to carry as few as two bits, a choice from only one of four possible patterns, or only one bit per bin in the case of ADSL2+, and really noisy bins are not used at all. If the pattern of noise versus frequencies heard in the bins changes, the DSL modem can alter the bits-per-bin allocations, in a process called "bitswap", where bins that have become more noisy are only required to carry fewer bits and other channels will be chosen to be given a higher burden. The data transfer capacity the DSL modem therefore reports is determined by the total of the bits-per-bin allocations of all the bins combined. Higher signal-to-noise ratios and more bins being in use gives a higher total link capacity, while lower signal-to-noise ratios or fewer bins being used gives a low link capacity.

The total maximum capacity derived from summing the bits-per-bins is reported by DSL modems and is sometimes termed sync rate. This will always be rather misleading as the true maximum link capacity for user data transfer rate will be significantly lower because extra data is transmitted that is termed protocol overhead, a reduced figure of around 84-87% at most for PPPoA connections being a common example. In addition some ISPs will have traffic policies that limit maximum transfer rates further in the networks beyond the exchange, and traffic congestion on the Internet, heavy loading on servers and slowness or inefficiency in customers' computers may all contribute to reductions below the maximum attainable.

The choices the DSL modem make can also be either conservative, where the modem chooses to allocate fewer bits per bin than it possibly could, a choice which makes for a slower connection, or less conservative in which more bits per bin are chosen in which case there is a greater risk case of error should future signal-to-noise ratios deteriorate to the point where the bits-per-bin allocations chosen are too high to cope with the greater noise present. This conservatism involving a choice to using fewer bits per bin as a safeguard against future noise increases is reported as the signal-to-noise ratio margin or SNR margin. The telephone exchange can indicate a suggested SNR margin to the customer's DSL modem when it initially connects, and the modem may make its bits-per-bin allocation plan accordingly. A high SNR margin will mean a reduced maximum throughput but greater reliability and stability of the connection. A low SNR margin will mean high speeds provided the noise level does not increase too much, otherwise the connection will have to be dropped and renegotiated (resynced). ADSL2+ can better accommodate such circumstances, offering a feature termed seamless rate adaptation (SRA), which can accommodate changes in total link capacity with less disruption to communications.

Vendors may support usage of higher frequencies as a proprietary extension to the standard. However, this requires matching vendor-supplied equipment on both ends of the line, and will likely result in crosstalk problems that affect other lines in the same bundle.

There is a direct relationship between the number of channels available and the throughput capacity of the ADSL connection. The exact data capacity per channel depends on the modulation method used.