An Internet Service Provider (ISP), sometimes called an Internet Access Provider, is a company that supplies individuals and businesses with access to the Internet. An ISP acts as an intermediary between a small business's computer system and the Internet. The ISP feeds the small business's outbound information to the Internet, and also feeds inbound Internet traffic into the small business's Internet connection. 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. In fact, an article in the Philadelphia Business Journal estimated that there were more than 7, 000 firms providing Internet access in the United States by mid-2000. The number of choices available makes selecting an ISP more difficult and time-consuming for small business owners. But the variety of providers also gives small businesses more options and keeps the price of Internet service competitive.
Online services—such as America Online (AOL) and Microsoft Network (MSN)—are probably the easiest way for beginners to gain access to the Internet. It is usually very easy to set up an account with one of the major online services. In fact, many of these companies include access programs on new computers or offer free setup software in the mail. Computer users can establish an account and begin surfing the Internet with just a few clicks of a mouse. Unlike many other ISPs, the online services also offer a number of additional services to members, like discussion forums on various topics.
In some ways, online services may be a good way for small businesses owners to introduce themselves to the Internet. They provide a reliable connection and a safe environment. Subscribers to online services also tend to be more tolerant of promotional activities undertaken by fellow subscribers who also happen to be business owners. But as far as conducting business on the World Wide Web, 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 fees—or collect a percentage of sales—when 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—such as Earthlink and Mind Spring—are large companies that 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, 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 ( www.thelist.com ), a searchable site with information on 8, 300 providers worldwide. Another possible source of information is The Directory ( www.thedirectory.org ), 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 Boardwatch ( www.boardwatch.com ).
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, small business owners must consider the needs of their business. It is important to think about the number of employees who will be using the Internet service, as well as what they will be using it for. Some businesses may only need e-mail accounts and Web surfing capabilities, for example, while others may be interested in establishing a Web site and conducting sales over the Internet. A home-based business may only need a single dial-up Internet connection, while a company that has offices in several locations may wish to use the Internet to link several local computer networks into one company-wide network. In addition to considering existing needs for Internet service, small business owners should also think about future needs when selecting an ISP.
Once you have compiled a list of potential ISPs and considered the company's service needs, the next step is eliminating those providers that cost too much, do not offer the services you need, or 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.
Most small businesses that move toward doing business on the Internet are interested in establishing a company web site. 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 customers' 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 providers—usually big companies like MCI and Sprint—are 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.
Small businesses looking for an ISP should also consider providers' connection rates and utilization rates. Connection rates refer to the percentage of users who are able to access the Internet through the ISP on the first try. Low connection rates mean that customers may encounter busy signals when trying to dial in to the ISP during peak hours. Utilization rates refer to the percentage of connection capacity the ISP typically uses. In other words, it describes how much Internet traffic passes through the ISP's connections. It is important to choose an ISP that is not overloaded with customers, because a very high utilization rate can slow down users' access.
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 business—rather than the ISP—owns 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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Freeman, Paul. "How to … Select an Internet Service Provider." Philadelphia Business Journal. July 14, 2000.
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Kilmer, William. Getting Your Business Wired: Using Computer Networking and the Internet to Grow Your Business. New York: AMACOM, 1999.
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