From David Bandel

pppd allows two compression schemes.

bsd_comp is a compression algorithm for ppp.  It is supposed to speed up transmissions over ppp circuits. That said, in order to use it, you have to specify it in your /etc/ppp/options or /etc/ppp/peers/provider file:

bsdcomp min,max  where min and max are values from 9-15.  If you specify only one value (min), then it will try for that value alone.  I don't recommend 15 (the max) on an old, slow 386 w/ 16Mb or less of RAM (actually a system like that should not try to do compression at all).

ppp_deflate is used in lieu of bsd_comp if it is found (and supported by the remote end).  It is specified thusly:

deflate min,max

again min and max are values from 8-15.  See above para for the rest of the info.