I just recently found out that routers connect you to the internet, but then I found out that ISPs also connect you do the internet. Can someone explain to me what really happens behind the scenes? Why do we need ISPs if our routers can connect to the internet by themselves?
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Your router have one of the simplest routing configurations possible. It just sends all local traffic to the local interface and all other traffic to the one uplink router. That is as simple as you can make it. The router you connect to at the ISP have a much more complex configuration. Firstly it connects to a number of other home routers and need to route the traffic in multiple directions. But it is likely also connected to other similar routers to itself and will have to be able to route traffic to the next neighborhood in that direction. Most ISPs set up these routers to communicate with each other so they can configure each other. A router announces to its neighboring routers which addresses it can reach and how far away and then these neighboring routers will configure themselves based on this information and then announce this new configuration to its neighboring routers. This not only keeps manual configuration to a minimum reducing labor costs and mistakes but it also allows the routers to handle any faults. If a router loses power or a fiber connecting to routers gets damaged the routers will automatically detect this and reconfigure themselves to send traffic thorugh the remaining working connections.
On a large scale the entire Internet works the same way. In this case the ISPs use a prococoll called BGP to exchange routing information with each other. A single ISP can be connected with other ISPs though hundreds of such connections between routers. They announce which addresses they can forward traffic to and the routers find the shortest path through the Internet.
You can technically set up your own ISP with the same type of router. A lot of corporations does this. You can get what is known as a BGP peering agreement with other ISPs to carry your traffic to the entire Internet. The cost of this is actually quite low. However the ISP expects that you connect your router directly to their routers located in one of the locations they are present at. These locations called Internet Exchanges are usually not very close by, usually just one or two in each city. So you need to pay for a line going to one of these exchanges which means that it start getting more expensive then regular Internet service.
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