The Intelligent Transportation System (ITS) relies heavily on data communications systems to link field equipment such as traffic sensors, changeable message signs and incident response vehicles with traffic operations centers. This paper has two main purposes. The first is to present a review of data communications concepts essential in the design of wireless modems for the ITS 220 MHz spectral allocations. The second is to propose an architecture for such modems which offers a spectral efficiency much higher than that available in current products. The new modem architecture is implemented using the combination of a digital signal processor, discrete electronics, and high level software. All sophisticated signal processing is implemented in software to provide both high performance and flexibility. The system forms an ideal testbed for the design of future enhancements and modifications to fit specific ITS applications. A prototype has been constructed and subjected to full bench testing. Preliminary field testing has been performed and more is in progress.