ISPs provide a subscriber with an IP address - a unique number identifying a specific computer that is connected to the ISP, and an e-mail address. Some ISPs also offer service like web hosting and data storage. Although these services may be limited in size they are often sufficient enough for an average user who doesn't want to pay extra money for same services from a third party. 

 

History:

The Internet was first introduced as a service on a closed network between government’s research laboratories and certain parts of universities. As Internet became more popular, universities began to grant access to it to more students and staff. Eventually, this brought up a lot of interest from businesses who saw potential for profit. Internet service providers began to offer access to the Internet to any person willing to pay. In 1989, a company out of Massachusetts was the first one to offer Internet access to the general public, which was done through the dial-up connection. 

Internet Classification: Tiers

ISP can be categorized into different classes that determine the company's size and capacity. When shopping around for an ISP you may have seen such abbreviations as T1, T2, and T3.

Tier 1 is a category of large Internet Providers, telecommunications companies, and organizations that provide infrastructure to, which connects numerous networks and Internet accessible devices that comprise the Internet.

Tier 2 is the most common category of Internet Providers. ISPs in this category peer with other netwroks, but also have to purchase IP transit to access some parts of the Internet from Tier 1 providers.

Tier 3 is an ISP that operates solely through purchasing IP transit from Tier 1 and Tier 2 providers to access the internet. These are usually small local companies with uncertain long-term prospects. 

Types of ISP services:

- Hosting ISPs provide email, FTP, and web-hosting services. An ISP will provide the storage space for its subscriber to run their own website. There is one drawback, however, when hosting a website through your ISP because the URL of your website will include the name of your ISP. This might become a problem in the future if the subscriber decides to change providers while still having an active website. Some other services the Hosting ISPs may offer could include virtual machines, clouds, or entire physical servers on which customers can run their own software.

- Some ISPs may also engage in peering, where multiple ISPs, big and small connect at peering points allowing data to be transferred between networks without charging one another for the data transmitted.

- A Virtual ISP (VISP) is an operation when a smaller ISP purchases services from another ISP, and resells it to its customers. This allows the VISP's customers to access the Internet using services and infrastructure, which is owned and operated by a larger (wholesale) ISP.

- Free ISPs are ISPs that provide services free of charge. The way that free ISPs make money is through display of advertisements while the user is connected. In a way free ISPs are selling the users' attention to the advertiser. This is a similar concept to television advertisements. Other free ISPs, which are often called freenets, are run nonprofit by mostly volunteer staff.

Inside look of an ISP:

How users can connect to the Internet:

- Dial-up

Dial-up ISPs offer Internet access through telephone lines. This type of service was the first one to be offered to general public. While it was a very popular    service for a long time, mainly due to its low cost, it has now become almost obsolete due to its very slow connection speed. It is still being used by some    consumers, however, who live in an area where Cable or DSL Internet service is not available and Satellite service is too expensive. The most popular          examples of Dial-up ISPs are AOL and NetZero.

- Cable

Cable ISPs use fiber optic lines to transmit data to the subscriber. These fiber optic lines are the same ones that are used to transmit cable television signals. The benefit of using Cable ISPs is faster data transfer speed than DSL and wouldn’t require an additional modem if a subscriber already has a cable box for the TV. However, it is also slightly more expensive than DSL and if a lot of people in the subscriber’s area subject the line to heavy data usage then the upload and download speeds may drop to speeds at or below those of a DSL connection.

- DSL

DSL or Digital Subscriber Line ISPs is currently one of the most popular choices for Internet subscribers. DSL offers much higher upload and download than dial-up while still using telephone line connection. It is a more expensive service than dial-up and requires the use of a special DSL modem that can be either bought separately or leased from an ISP.

- Satellite

Satellite Internet service is the best choice for a consumer that lives in a rural area where DSL/Cable Internet isn’t available, but who still wants data transfer speeds faster than Dial-up. Satellite ISPs service would require an installation of a satellite dish for two-way data communication. Satellite dish would have to be installed with a clear view to the south since that’s where the satellites orbit the earth, over the equator area. The biggest downsides to Satellite Internet are that data upload speed is slower than DSL, and the cost of the service is significantly higher.