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ISP is an abbreviation for Internet Service Provider. It is a place that allows people to connect to the internet, usually for the cost of a local call, and sometimes for free. With the advent of broadband connections, ISPs make deals with phone companies to allow permanent access for no cost at all.

In most countries, local calls are at a fixed rate, which is for example 25 cents to connect for as long as you like. ISPs take advantage of this by allowing people to connect to the internet cheaply.

In some countries, such as New Zealand and Germany, this created a problem, because their local calls were charged per minute. While the charge per minute was low, it effectively made long term internet use almost impossible.

An ISP itself connects through to central routers through to the rest of the internet and to the world. Whilst it is possible to connect to the internet without going through an ISP, it is much cheaper to use an ISP.

ISPs typically charge for hours used per month and/or how much you download (sometimes also charging for upload). They may allow a certain amount within a contract. They also will charge for speed.

With the advent of broadband, it can be cheaper to use broadband than dialup, once you consider the cost of local calls. However, if you get faster broadband then it can be much more expensive. Most broadband providers charge for how much you download as well, and can charge huge amounts if you go over your limit.