How to Start an ISP

Written by jerry garner
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How to Start an ISP
Network Router (DeclanTM, Flickr.com Creative Commons License)

The thought of becoming an Internet service provider (ISP) is an attractive prospect for many people who want to start their own business. Chances are that you'll never be the next AOL, but it is not impossible. Even if you do not become the world's largest provider, you can still earn a very good living by providing Internet service to your local market. Owning your own ISP will also create jobs for your local economy and make you a valued member of the community.

Skill level:
Moderately Challenging

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Things you need

  • Network servers
  • Access servers
  • Network hub
  • Internet switch
  • Internet backbone access
  • T1 lines
  • ISP billing software

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Instructions

    How to Start an ISP

  1. 1

    Write a business plan. One thing that all successful business have in common is a written business plan. Decide if you will broadband service ora dial up ISP. Know what customers are in your market and how will you reach them. Identify your costs and come up with a plan of how you will sign on enough subscribers to cover costs. Using a business plan is an effective tool to help keep your business on the pathway to success.

  2. 2

    Establish your corporate structure. Determine if your ISP will be a sole proprietorship, a partnership or a limited liability company. After you have identified how your business will be structured, you can register your business as a company. Go to the office of the city clerk in the town where your ISP will be located. The clerk will assist you in filing the necessary paperwork to legally establish your ISP business.

  3. 3

    Scout for an office location. You just need room for an administrative staff, a sales and marketing team and a customer support department. Furnish your office with desks, telephones and computers so that all of your employees are adequately equipped to do their job.

  4. 4

    Locate adequate facilities to host the servers that will power your ISP business. The servers for your business network can be hosted at your office, but the servers for the ISP require a more demanding location. The farther away from the telephone company or Internet backbone, the more expensive your switches and hubs will cost to operate. Try to find a hosting co-location facility or ISP building that can provide a direct hookup to the Internet backbone in your area.

  5. 5

    Get access to the Internet backbone. The general philosophy of operating an ISP is that you buy large amounts of data transfer at wholesale rates, then sell that same transfer at a retail price. The way to do this is to lease access to the Internet backbone for your network. This access can be leased from the telephone company, cable company or anyone else who owns broadband cabling.

  6. 6

    Determine how many T1 lines will need to access your connection to the Internet backbone. You can expect each T1 line to support the Internet activity of about 200 concurrent users. Since not everyone will be online at the same time, most ISPs extrapolate this to mean that there should be one T1 line for every 1,500 subscribers. Monitor your service carefully and if you notice that your system begins to lag during peak times, bump up the number of T1 lines.

  7. 7

    Acquire a switch to use with your ISP network. Many small ISPs will use what is known as POTS, which stands for "plain old telephone service." This is really an outdated method of managing Internet traffic and is not recommended. You will get much better results by using a 24-channel T1 switch, although multiple switches may be required if you set up a large number of T1 lines in the previous step. You can also use a PRI switch, which stands for "primary rate interface."

  8. 8

    Buy an access server to control your subscribers' login process on your ISP network. Access servers combine a bank of modems with a network monitoring terminal and are used as the gateway that verifies a user's account before giving that account access to your ISP. The most popular access servers are made by 3Com and Cisco. Other brands include Ascend, Nortel and Livingston.

  9. 9

    Buy the network servers to which your subscribers gain access. These servers can be sophisticated rack-mounted servers or high power personal computers. You will need an ISP network server for each of your major functions, which include DNS servers, e-mail servers, web browsing and usenet newsgroups. One server for each function will be more than sufficient for most start up ISPs, although you may need to expand this network as you take on larger numbers of subscribers.

  10. 10

    Connect all of your devices. Using a hub, locate all of your ISP network servers behind a firewall, with your access server in the front. The access server should be connected to your Internet switch, which has two-way communication with the Internet backbone via the T1 lines you have set up. You now have all of the hardware that is required to operate your own ISP.

  11. 11

    Install an ISP management and billing program on the network to manage your subscriber accounts. There are a number of programs that are commercially available. One popular ISP software program is OptiGold ISP. This program will manage the access and billing of all of your subscribers. You can try the program free for 30 days. If you like it and wish to continue using it, the cost is only £650. Once this software has been installed on your network, you now have a completely operational ISP and only need to advertise your service to acquire customers.

Tips and warnings

  • If you just need a simple dial-up ISP, you may wish to consider using a turnkey package that will provide everything you need right out of the box.

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