The terminal line speed tells the computer how fast to read and write data on the terminal.

If the terminal is connected to a real serial line, the terminal speed you specify actually controls the line—if it doesn’t match the terminal’s own idea of the speed, communication does not work. Real serial ports accept only certain standard speeds. Also, particular hardware may not support even all the standard speeds. Specifying a speed of zero hangs up a dialup connection and turns off modem control signals.

If the terminal is not a real serial line (for example, if it is a network connection), then the line speed won’t really affect data transmission speed, but some programs will use it to determine the amount of padding needed. It’s best to specify a line speed value that matches the actual speed of the actual terminal, but you can safely experiment with different values to vary the amount of padding.

There are actually two line speeds for each terminal, one for input and one for output. You can set them independently, but most often terminals use the same speed for both directions.