Internet Service Providers (ISPs)

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Internet Service Providers (ISPs)

An Internet Service Provider (ISP) is a company that provides third parties access to the Internet. Many ISP also offer other related services such as Web site design and virtual hosting. An ISP has the equipment and the telecommunication line access required to have a point-of-presence on the Internet for the geographic area served. An ISP acts as an intermediary between its client's computer system and the Internet. ISPs take several forms and offer a wide variety of services. They generally charge their customers for Internet access depending on their usage needs and the level of service provided.


Internet access is available from a wide range of companies, including telephone and cable companies, online services, large national ISPs, and small independent ISPs. There are no reliable data on the number of ISPs in the market. An article in the Philadelphia Business Journal estimated that there were more than 7,000 firms providing Internet access in the United States by the middle of 2000. Other industry observers and participants dispute this figure suggesting that the number of ISPs is much lower. Whatever the actual number of ISPs may be, what is certainly clear is that those interested in setting up an Internet access account have many choices available. Choosing one that best suits one's needs takes a little study.

Online Services

The first Internet service providers to become widely known weren't even full ISPs but rather what were known as online services because of their members-only offerings and somewhat limited full Internet access. These were America Online (AOL) and CompuServe. It is usually very easy to set up an account with one of the major online services. A computer user equipped with a modem can establish an account of this sort and begin surfing the Internet with just a few clicks of a mouse.

Although easy to establish and set up, an account with one of these large online services may not be the most appropriate way for a small business to access the Internet. Online services have some disadvantages. For example, access to a small business's web site and promotional information may be limited to members of the online service. In addition, many online services charge high advertising feesor collect a percentage of saleswhen they are used to conduct Internet commerce. Finally, some online services monitor and restrict the content of information sent via e-mail or posted to newsgroups.

National ISPs

Another type of ISP is the national ISP. These include such companies as Earthlink and MindSpring who offer Internet access in a broad geographical area. Compared to local ISPs, these companies tend to offer higher-speed connections and greater long-term stability. Many national providers also offer a broad range of services, including long-distance telephone service, web site hosting, and secure electronic transactions. They are generally a good choice for small businesses that want employees to be able to access the Internet while traveling. They may also be convenient for businesses that operate in several locations and wish to use the ISP for all locations. The main disadvantages of the larger ISPs are that they rarely offer the level of personalized service available from smaller providers, and they may have so many customers that a small business's employees could have trouble gaining access during prime business hours.

Small ISPs

Small, independent ISPs operate in many local or regional markets. These companies vary widely in size, stability, and quality of service. On the plus side, their access lines may be less busy than national ISPs. In addition, many smaller providers specialize in offering services to small businesses. Some of these ISPs may visit a small business customer's work site, evaluate the company's Internet access needs, and present different service packages. They may even assign a personal account representative to handle the small business's growing electronic needs.


The first step in selecting an Internet Service Provider for your small business is to compile a list of potential vendors. According to Vince Emery in How to Grow Your Business on the Internet, looking in the local telephone directory is not the best place to start. ISPs are typically classified under a variety of confusing headings in the yellow pages. In addition, making a random selection based on a advertisement is no way to guarantee good service.

Instead, Emery recommends beginning your search for an ISP on the Internet. There are several sites that list ISPs by geographic region and also include pricing and contact information. The oldest and best-known of these sites is The List (, a searchable site with information on 8,300 providers worldwide. Another possible source of information is an organization named "The Directory" (, which lists 13,000 ISPs. Yahoo! and other search engines also yield a great deal of information about service providers. Those without access to the Internet can obtain a printed guide to ISPs from Light Reading (

Small business owners might also benefit from calling business associates, professional organizations, chambers of commerce, and local computer users groups to obtain suggestions and references for potential ISPs. Another option is to hire a consultant to help you evaluate your business's Internet access needs, sort through the various options, deal with the telephone company and ISP candidates, and avoid unnecessary costs or services. In any case, Emery recommends obtaining at least three quotes, encompassing both price and services provided, before selecting an ISP for your small business.


In choosing among the various ISP options, the most important thing to consider is the needs of the business. How much work will be done online and how dependent will the business's communications be on e-mail and other online services? The answer to these questions will determine the range of bandwidth neededa simple dial-up connection or a broad band connection capable of providing a number of people with high-speed connections simultaneously. By determining the bandwidth or speed requirements for the Internet connection one may help to limit the number of ISPs to consider.

The next step in choosing an ISP is eliminating those providers that 1) cost too much, 2) do not offer the services you need, or 3) cannot provide the right type of connection. One important factor for small businesses to consider is the availability of technical support. According to William Kilmer in Getting Your Business Wired, ISPs vary widely in the level of support they offer to customers. Online services make it easy to set up an Internet account, for example, but may not be able to provide the personal assistance a small business owner needs. It may be helpful to check the hours that customer support is offered by telephone, and also to inquire about the average time it takes the ISP to respond to requests for assistance.

A Web site for the company is something that many firms hope to establish while they get themselves connected to the Internet. Most ISPs are able to provide assistance to users in setting up a web site, and many ISPs provide space on their servers to host client Web sites. But Kilmer noted that small businesses may need to work with national providers or local providers that specialize in business services in order to establish a professional site with its own domain name. Otherwise, the business may be limited as to the size or usage of its site. Ideally, an ISP should be able to register a domain name, offer web designers to help create the site, and provide statistics on the number of people who access the site.

Another important factor to consider in choosing an ISP is the provider's tier rating. ISPs are rated according to their proximity to the backbone of the Internet, known as their point of presence (POP). Tier 1 providersusually big companies like AT&T and Sprintare linked directly to the Internet. Tier 2 providers lease their connections from Tier 1 companies, and so on down the line. The lower an ISP's tier rating, the further its connections lie from the Internet and the slower its access is likely to be. Kilmer recommends that small businesses work with ISPs rated Tier 3 or better.

Other technical considerations in choosing an ISP include the speed and redundancy of its connections. Ideally, an ISP should maintain several different connections to balance traffic and make sure that one is always available in case another fails. Finally, small business owners may wish to seek out an ISP that offers special packages for small businesses. For example, some providers offer several dial-up accounts or mailboxes for a reduced price. Others may offer special deals on registering a domain name and hosting a company web site.


When you have evaluated your business's needs as well as the various services available, it is time to sign a contract with an ISP. Kilmer emphasizes that small business owners should negotiate the terms of the contract rather than accepting a stock agreement. He also mentions a number of potential pitfalls avoid when making the final arrangements for Internet access through an ISP.

First, small business owners should look out for hidden charges. Sometimes the rate quoted by an ISP is a low monthly fee, but the contract specifies additional charges for such services as installing lines, providing training and technical support, or registering a domain name. Some ISPs even charge fees by volume of incoming or outgoing e-mail messages, or by the hour for access above a certain time limit. Second, Kilmer says to be sure that any contract specifies the length of time an ISP has to forward Internet traffic to and from your business. Otherwise, your small business may encounter delays ranging from minutes to days.

Third, you should make sure that your small busi-nessrather than the ISPowns the domain name of your web site. Registering a domain name online is a fairly simple and inexpensive process, and most ISPs will agree to host your site for a reasonable fee. If you decide to change ISPs in the future, owning the domain name allows you to take it with you to a new provider. Fourth, Kilmer warns small business owners never to allow an ISP to claim rights to any information or intellectual property from their companies. You may even wish to include language in the contract that prohibits the ISP from using your property (such as software stored on its server) or disclosing any information about your company.

Finally, once a small business signs up with an ISP and begins using the Internet, it is important to maintain a relationship with the provider. Most ISPs add new equipment on a regular basis, but they may not always notify customers of advances and updates. It may be a good policy to call technical support or your account representative several times per year in order to review your current settings and take advantage of potential performance improvements.


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Dysart, Joe. "How to Choose an ISP to Meet Your Needs." Selling. April 2000.

Emery, Vince. How to Grow Your Business on the Internet. Third Edition. Coriolis Group, 1997.

Freeman, Paul. "How to Select an Internet Service Provider." Philadelphia Business Journal. 14 July 2000.

Hise, Phaedra. Growing Your Business Online: Small Business Strategies for Working the World Wide Web. Holt, 1996.

Kilmer, William. Getting Your Business Wired: Using Computer Networking and the Internet to Grow Your Business. AMACOM, 1999.

Lake, Matt. "Unlimited Access." Home Office Computing. August 1998.

                                 Hillstrom, Northern Lights

                               updated by Magee, ECDI

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Internet Service Providers (ISPs)

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