ATM is a connection-oriented protocol that transmits all types of data over WANs by dividing it into fixed-size cells. It provides quality of service guarantees through connection setup and traffic management. ATM aims to provide a single networking protocol that can efficiently transmit multimedia such as voice, video, and data through small, fixed-size cells and supporting connections with variable bandwidth. It saw initial popularity but failed to replace other protocols like IP due to high costs and complexity.