Yep, software modem.

So if you bogged your system in any way while doing anything online, you'd DC in a heartbeat.

Additionally, the software part was buggy and prone to getting tainted beyond repair.

Driver updates also often borked everything.

And replacing the modem was only 50/50 going to fix your issues with it, so until the internet developed a driver cleaner tool specifically for the USR Softmodem, you often had to reinstall Windows to actually fix the issues.