Internet Service Providers (ISPs) are companies that provide access to the Internet. Some well-known ISPs are America Online (AOL), Prodigy and AT&T WorldNet.
In order to connect to an ISP, your computer (1) needs a modem (2), a piece of hardware that uses telephone lines to call up the ISP's modem pool. The modem pool, allows multiple connections to the ISP local server (3) through the same telephone number. Alternatively, ethernet cable provides a faster and more direct connection. However, ethernet is more expensive and does not exist in as many places as phone lines.
Large ISPs often have local servers that talk to a central server (4). For example, AOL's central server is in Virginia, but local servers around the country allow everyone to connect without making a long distance phone call. All information you send to the local server is sent to the central server.
Once you are connected, the ISP then acts as a router (5) to the rest of the Internet, allowing you to access information such as web pages. ISPs also act as mail servers so you can send mail to and receive mail from people who do not use your ISP.
The software used with most ISPs is client software, meaning that the web browser and e-mail software, for example, exists on your machine. A few ISPs use software that you run off of the ISP server, but this is not commonly used. Some ISPs, such as AOL, have local information services, like bulletin boards and chat rooms, available only to people who have accounts with that ISP.