how did companies like AOL and Netscape make money selling Internet though the phone companies landline?

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I’m also particularly interested in how you were able to choose whichever 3rd party provider for your Internet?

No idea if this will take off but it was puzzling me the other day, if you took the time to read this, thanks, and have a great one!

In: Economics

6 Answers

Anonymous 0 Comments

Early dial-up services like AOL often charged by the hour

You would get the phone number(s) for the service and phone-in to the internet using a dial-up modem.

You needed to pay for a phone line from your telco separately (which most homes had anyway), and so long as said line was being used for the internet you would get a busy signal when calling the house. The Telco meanwhile would see the call to AOL as any other call.

So the short answer is you would pay your Telco + AOL to get online.

AOL would usually have local dial-up ‘servers’ within your region to avoid you having to pay long distance for the calls.

Said ‘servers’ would probably be a router with a couple T1 lines (1.5mb/s) plugged into it. One that was a connection for the internet itself like a modern fiber line, and another T1 that acted as a voice line with 24 channels or 24 simultaneous incoming calls from modems (23 + a control channel if you want to be pedantic).

Each users bandwidth was limited by speed of the modem, which in practice usually maxed out at around 25-30kb/s or for context barely enough for low-quality live audio, or 3-8 minutes to download the average MP3 file.

Different ISPs in the era would compete with deals, how much they charged per hour, or offering unlimited time online and charging for bandwidth used instead. AOL had a number of tools that they offered for free including an early web browser and indexing service to find stuff online (long before Google).

Once telco’s started offering their own dial-up internet services AOL started to be pushed out of the market and came up with different ways to be competitive. Eventually though broadband too over.

Netscape meanwhile wasn’t an ISP, they made an early web browser. Netscape charged for the browser, and when Microsoft made Internet Explorer free it resulted in a lawsuit but that’s a different ELI5.

Netscape’s spiritual successor today is Mozilla Firefox.

Anonymous 0 Comments

You had a device called a modem, that used your phone line to transfer data to and from AOL. AOL charged a monthly subscription.

Netscape wasn’t an Internet provider. They were just a company that made an early web browser.

Anonymous 0 Comments

So, you don’t understand how the internet works. I’m not judging you, just stating that as the reason you seem confused.

The internet works because your computer connects to other computers. What AOL and Netscape offered was a way to access that connection. You would be allowed to access a server that was connected to other servers.

Now, how do you access the server? Well that required a modem that needed a phoneline back in the day.

AOL/Netscape charged you per hour use of the server you connected to.

The phone company charged you for basically making a call for X hours.

They didn’t sell internet through the landline. They sold internet access. How you got there(the phone company) was your problem to sort out.

Anonymous 0 Comments

The phone line was just the method of connection. AOL was a service you paid a subscription for. You used a modem to dial into their servers and accessed the internet via their system.  Other ISP’s worked in a similar manner. To the telephone system the call was indistinguishable from a voice call.   Additionally, netscape was only a web browser (think edge or firefox), they never were an ISP to my knowledge.

Anonymous 0 Comments

When you access the internet, you’re connecting to another computer for the purpose of acquiring information. In order to do that easily, you first need to connect to one computer, which will then facilitate information exchange between your device and the server you’re trying to get information from.

That first computer, or server, that facilitates that information exchange is your ISP, or internet service provider.

For example. When you browse Reddit, your device will first connect to your ISP, and then asks the isp to connect you to Reddit. Reddit and you are connected, but data flows through your ISP.

Dial-up, DSL, cable, fiber, wireless, ect… are just means to connect your device to the ISP.

Dial-up work by having a device (modem) literally calling the ISPs through the phone. All data transfers were computers literally talking to each other on the phone.

AOL, and other dial-up ISPs made money by providing a service to facilitate data exchange, but requires a phone line for yours and their computers to speak.

Anonymous 0 Comments

So the root of the question seems to be <your question> compared to today where you buy the whole thing from one company like fiber or cable companies

It’s because in the dialup world you were just making a phone call. Everything was disaggregated. Your connection to the ISP was just a phone call like you might call your grandmother, and didn’t require any special hardware or setup in the phone system. On each end of the line were computers with modems

In the modern era, you’re buying dedicated internet-only physical connections. The internet access and the connection to the ISP are all intrinsically linked vs. being an application riding on top of a generic phone line

Actually, in the early days of DSL, it still worked like dialup. Multiple ISPs would have servers in the phone office and you could use your DSL line to connect to many different ISPs