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There has been an increasing interest in creating short-range, low data rate, underwater wireless sensor networks for scientific marine exploration and monitoring. However, the lack of an inexpensive, underwater acoustic modem is preventing the proliferation of these sensor networks. Thus, we are building an underwater acoustic modem starting with the most critical component from a cost perspective-the transducer. The design substitutes a commercial transducer with a homemade transducer using cheap piezoceramic material and builds the rest of the modem's components around the properties of the transducer to extract as much performance as possible. This letter describes the high level design, and cost and power characteristics of each of the major modem components: the transducer, the analog transceiver, and the digital signal processor of our modem prototype.