Modulation is the process by which voice, music, and other "intelligence" is added to the radio waves produced by a transmitter. The different methods of modulating a radio signal are called modes. An unmodulated radio signal is known as a carrier. When you hear "dead air" between songs or announcements on a radio station, you're "hearing" the carrier. While a carrier contains no intelligence, you can tell it is being transmitted because of the way it quiets the background noise on your radio.
Here is a summary of different modes of modulation:
Frequency Modulation (FM)
In Continuous Wave (CW), AM, and Single Sideband (SSB), the carrier of the signal will not change in a normally operating transmitter. However, it is possible to modulate a signal by changing its frequency in accordance with a modulating signal. This is the idea behind frequency modulation (FM).
The unmodulated frequency of a FM signal is called its center frequency. When a modulating signal is applied, the FM transmitter's frequency will swing above and below the center frequency according to the modulating signal. The amount of "swing" in the transmitter's frequency in any direction above or below the center frequency is called its deviation. The total frequency space occupied by a FM signal is twice its deviation.
As you might suspect, FM signals occupy a great deal of frequency space. The deviation of a FM broadcast station is 75 kHz, for a total frequency space of 150 kHz. Most other users of FM (police and fire departments, business radio services, etc.) use a deviation of 5 kHz, for a total frequency space occupied of 10 kHz. For these reasons, FM is mainly used on frequency above 30 MHz, where adequate frequency space is available. This is why most scanner radios can only receive FM signals, since most signals found above 30 MHz are FM.
The big advantage of FM is its audio quality and immunity to noise. Most forms of static and electrical noise are naturally AM, and a FM receiver will not respond to AM signals. FM receivers also exhibit a characteristic known as the capture effect. If two or more FM signals are on the same frequency, the FM receiver will respond to the strongest of the signals and ignore the rest. The audio quality of a FM signal increases as its deviation increases, which is why FM broadcast stations use such large deviation. The main disadvantage of FM is the amount of frequency space a signal requires.
Amplitude Modulation (AM)
In amplitude modulation, the strength (amplitude) of the carrier from a transmitter is varied according to how a modulating signal varies.
When you speak into the microphone of an AM transmitter, the microphone converts your voice into a varying voltage. This voltage is amplified and then used to vary the strength of the transmitter's output. Amplitude modulation adds power to the carrier, with the amount added depending on the strength of the modulating voltage. Amplitude modulation results in three separate frequencies being transmitted: the original carrier frequency, a lower sideband (LSB) below the carrier frequency, and an upper sideband (USB) above the carrier frequency. The sidebands are "mirror images" of each other and contain the same intelligence. When an AM signal is received, these frequencies are combined to produce the sounds you hear.
Each sideband occupies as much frequency space as the highest audio frequency being transmitted. If the highest audio frequency being transmitted is 5 kHz, then the total frequency space occupied by an AM signal will be 10 kHz (the carrier occupies negligible frequency space).
AM has the advantages of being easy to produce in a transmitter and AM receivers are simple in design. Its main disadvantage is its inefficiency. About two-thirds of an AM signal's power is concentrated in the carrier, which contains no intelligence. One-third of the power is in the sidebands, which contain the signal's intelligence. Since the sidebands contain the same intelligence, however, one is essentially "wasted." Of the total power output of an AM transmitter, only about one-sixth is actually productive, useful output!
Other disadvantages of AM include the relatively wide amount of frequency space an AM signal occupies and its susceptibility to static and other forms of electrical noise. Despite this, AM is simple to tune on ordinary receivers, and that is why it is used for almost all shortwave broadcasting.