Internet Service Provider (ISP): What They Do and Examples

What Is an Internet Service Provider (ISP)?

An Internet service provider (ISP) is any company that provides Internet access to consumers and businesses. The Internet is provided through a variety of channels, including cable, DSL, fiber optics, dial-up, and wireless, with most ISPs offering all options. Most large telecommunication companies, such as mobile and cable companies, are ISPs.

ISPs make it possible for their customers to surf the web, shop online, conduct business, and connect with family and friends—all for a fee. ISPs may also provide other services, including email services, domain registration, web hosting, and browser packages.

An ISP may also be referred to as an information service provider, a storage service provider, an Internet network service provider (INSP), or any combination of these three based on the services offered by the company.

Understanding Internet Service Providers (ISPs)

Internet service was originally limited to government agencies and specific university departments. The technology was developed to provide access to the general public through the World Wide Web in the late 1980s. Initially, consumers were able to gain limited access through a few ISPs—America Online (AOL) being one of the most recognized names at the time—that used dial-up connections using a phone line.

The number of ISPs increased to several thousand during the mid-1990s, and the boom was on. As the options for connectivity increased and speeds moved away from slower dial-up connections, the Internet economy was born. Providers developed more advanced technology, allowing customers high-speed access via broadband technology through cable and digital subscriber line (DSL) modems.

Behind all of this was a multilayered web of connections. Local ISPs sold access to customers but paid larger ISPs for their own access. These larger ISPs, in turn, paid even larger ISPs for access. The trail leads to Tier 1 carriers that can reach every network access point without having to pay for access. These Tier 1 companies own the infrastructure in their region.

Internet service providers provide their customers with access to the Internet—plain access providers just handle the traffic between the individual and the Internet as a whole. But there may also be other services bundled in depending on the customer’s location and availability. Some of these services include:

• Email services
• Web hosting services
• Domain registration
• Browser and software packages 

What Are Tier 1 Internet Service Providers?

Consumers and businesses are accustomed to the idea that they should be able to connect to the Internet from anywhere—whether at home or while sitting in a local coffee shop. To deliver connectivity at high speed, companies have to invest in expensive infrastructure that includes fiber optic cables.

Because of the high cost of investment, Tier 1 ISPs often appear like a monopoly in their regions. A specific company may appear to have near-total or total control of the market in a particular area. In the United States, companies may appear to operate in an oligopoly rather than a monopoly, where two or more companies work together to achieve market returns.

This idea is reinforced by the fact that some of the major American ISPs became so prominent by using the infrastructure that they inherited from the original telecom monopoly that was Ma Bell.

Current Tier 1 ISPs continue to invest in infrastructure, and they may well be the only players in that market until new technologies that don’t depend on fiber cables in the ground emerge. Think the likes of Starlink, an entity inside SpaceX, founded by Elon Musk, which is developing a low-latency, broadband Internet system that aims to meet the needs of consumers around the globe, enabled by a constellation of low Earth orbit satellites.

The ongoing demand for faster speeds and an improved Internet experience means that most of the biggest ISPs have invested heavily in 5G wireless technology.

Google Fiber

Others have tried to enter the Tier 1 ISP market and have met with mixed results. Alphabet, Google’s parent company, ran Google Fiber as part of its Access Division.

As of 2024, Google Fiber is only available in select cities in 19 states: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Idaho, Iowa, Kansas, Missouri, Nebraska, Nevada, North Carolina South Carolina, Tennessee, Texas, Utah, and Washington.

Examples of Internet Service Providers

Many of the largest ISPs are also large telecommunications companies that provide a wide array of services. For example, in addition to data and broadband Internet services, AT&T (T) provides local and long-distance telephone service, managed networking, telecom equipment, and feature film, television, and gaming production and distribution.

Verizon Communications (VZ) is another ISP that has a diversified range of services. The conglomerate offers local and long-distance voice, as well as broadband video, data center and cloud services, and security and managed network services.

To help low-income families and older people handle the cost, some ISPs offer special programs. The federal government also opened an Emergency Broadband Benefit (EBB) program on May 12, 2021, to provide help to families to get these services. The EBB was replaced by the Affordable Connectivity Program on Dec. 31, 2021.

The Bottom Line

An Internet service provider (ISP) is usually a large telecommunications company that provides Internet and other related services to consumers. Some ISPs are the only provider in a specific region while other regions give consumers access to multiple ISPs. Consumers typically look for good service and reliable speeds at a fair price point when considering which ISP to choose.