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What is an Internet Service Provider (ISP)?

An ISP, or Internet Service Provider, is a company or organization that offers users access to the Internet. ISPs supply the necessary infrastructure, services, and connectivity to enable individuals, businesses, and institutions to connect to the global network, facilitating online communication, data exchange, and various Internet-based activities.

Dissecting Internet Service Provider (ISP)

The history of ISPs dates back to the late 1980s and early 1990s, as the Internet began to transition from a research and government network to a publicly accessible global network. Prior to the emergence of ISPs, access to the Internet was mostly limited to universities, research institutions, and government agencies. The creation of ISPs was driven by the increasing demand for public access to the growing network and its vast resources, as well as the commercial potential of providing such access.

ISPs were initially established by pioneering companies like CompuServe, Prodigy, and AOL in the United States. These early ISPs offered dial-up connections, which allowed users to access the Internet through their telephone lines. The rise of ISPs democratized Internet access, benefitted individuals, businesses, and organizations alike.

Individuals gained the ability to access information, communicate with others, and engage in various online activities, while businesses and organizations could reach a wider audience and explore new commercial opportunities. 

Types of ISPs

There are various types of ISPs, each of which caters to a distinct set of needs and markets. The following are the main types:

Tier 1 ISPs

Tier 1 ISPs are large, global providers that have extensive network infrastructure and can reach every other network on the internet without purchasing transit from another ISP. They are the backbone of the internet and are responsible for maintaining the connections between countries and continents. Examples of Tier 1 ISPs include AT&T, CenturyLink, and NTT Communications.

Tier 2 ISPs

Tier 2 ISPs are regional or national providers that have their own network infrastructure, but they rely on Tier 1 ISPs for connectivity to other networks. They purchase transit from Tier 1 ISPs and may also have peering agreements with other Tier 2 ISPs to share network capacity. Examples of Tier 2 ISPs include Cogent Communications, Hurricane Electric, and Zayo.

Tier 3 ISPs

Tier 3 ISPs are local providers that primarily focus on a specific region or market. They have limited network infrastructure and purchase transit from Tier 1 or Tier 2 ISPs to connect to the global internet. These ISPs are often responsible for the "last mile" of connectivity, delivering internet services directly to end-users. Examples of Tier 3 ISPs include local broadband providers, DSL providers, and small wireless ISPs.

Content Delivery Networks (CDNs)

Specialized ISPs that focus on delivering content, such as web pages, images, and video, to end-users from servers located closer to them. By caching and delivering content from local data centers, CDNs can reduce latency and improve the user experience. Examples of CDNs include Akamai, Cloudflare, and Fastly.

Mobile Network Operators (MNOs)

ISPs that provide wireless internet connectivity through mobile networks, such as 4G, LTE or 5G. They operate their own cellular infrastructure and are responsible for providing voice, text messaging, and data services to mobile devices. Examples of MNOs include Verizon, AT&T, T-Mobile, and Vodafone.

Satellite ISPs

Provide internet connectivity via geostationary or low-Earth orbit (LEO) satellites. This type of ISP is particularly useful in remote areas or places with limited terrestrial infrastructure. Satellite ISPs typically offer lower bandwidth and higher latency compared to other types of ISPs. Examples of satellite ISPs include Viasat, HughesNet, and Starlink.

Virtual Network Operators (VNOs) or Resellers

Companies that do not own their own network infrastructure but instead lease capacity from other ISPs and resell it to their customers. These providers may offer value-added services, such as customer support, billing, or unique product offerings, to differentiate themselves in the market. Examples of VNOs include MVNOs (Mobile Virtual Network Operators) like Boost Mobile, Cricket Wireless, and Consumer Cellular.

How ISPs Work

The internet is a global network of interconnected computers and devices that communicate with each other using the Internet Protocol (IP). Data on the internet is transmitted in small units called packets, which contain the sender's and recipient's IP addresses as well as other information to ensure accurate transmission.

ISPs play a critical part in facilitating the exchange of data packets between different networks and devices. Here's a general overview of how ISPs work:

  1. Network Infrastructure: ISPs own or lease physical infrastructure, such as fiber-optic cables, copper wires, or wireless transmitters, to build their networks. The type of infrastructure used depends on the services provided by the ISP (e.g., broadband, DSL, satellite, or mobile).
  2. Subscriber Connection: ISPs connect customers to their networks using various technologies. For residential customers, this may involve installing a modem that connects to a phone line (DSL), coaxial cable (cable broadband), or fiber-optic cable (FTTH). For businesses, dedicated leased lines or Ethernet connections may be used. In wireless or mobile scenarios, subscribers connect to the ISP's network via cell towers or Wi-Fi access points.
  3. IP Address Assignment: ISPs are responsible for assigning IP addresses to their customers. They receive blocks of IP addresses from regional Internet registries (RIRs) and allocate them to customers using static (fixed) or dynamic (temporary) assignment methods.
  4. Routing: ISPs use routers to direct data packets through the internet. Routers determine the most efficient path for data packets to reach their destination, using routing protocols such as Border Gateway Protocol (BGP) to exchange information about available network paths with other routers.
  5. Internet Connectivity: ISPs establish connections with other ISPs to exchange data and provide their customers with access to the global internet. This is achieved through agreements like peering (mutually beneficial data exchange without fees) or transit (paying another ISP to carry data to the wider internet).

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