In the past, most ISPs were run by the phone companies. Now, ISPs can be started by just about any individual or group with sufficient money and expertise.

In addition to Internet access via various technologies such as dial-up and DSL, they may provide a combination of services including Internet transit, domain name registration and hosting, web hosting, and colocation.

How Internetservice Providers connect to the Internet

Just as their customers pay them for Internet access, ISPs themselves pay upstream ISPs for Internet access. In the simplest case, a single connection is established to an upstream ISP using one of the technologies described above, and the ISP uses this connection to send or receive any data to or from parts of the Internet beyond its own network; in turn, the upstream ISP uses its own upstream connections, or connections to its other customers (usually other ISPs) to allow the data to travel from source to destination.

In reality, the situation is often more complicated. For example, ISPs with more than one Point of Presence (PoP) may have separate connections to an upstream ISP at multiple PoPs, or they may be customers of multiple upstream ISPs and have connections to each one at one or more of their PoPs.

ISPs may engage in peering, where multiple ISPs interconnect with one another at a peering point or Internet exchange point (IX), allowing the routing of data between their networks, without charging one another for that data - data that would otherwise have passed through their upstream ISPs, incurring charges from the upstream ISP. ISPs who require no upstream, and have only customers and/or peers, are called Tier 1 ISPs, indicating their status as ISPs at the top of the Internet hierarchy. Routers, switches, Internet routing protocols, and the expertise of network administrators all have a role to play in ensuring that data follows the best available route and that ISPs can "see" one another on the Internet.