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How to set up an internet service provider business

By request of a very close friend of mine I am here today to write about what goes into setting up an ISP. Most of the material I will be talking about come from my own experience in the ISP business, my many years as a network technician and also from the “Internet Peering Workbook” which I believe anyone who is serious about setting up an ISP business should purchase and read.

Let start from the beginning…
To commence we need to understand that an ISP is first and foremost a business and as such share many similarities with any other types of business, the purpose of this note is not to focus too much about the business. The purpose of this note is not to focus too much on the business aspect of an ISP but rather the technical aspect, which I believe is the core service the ISP deliver.
Now that we understand that an ISP set-up go beyond just the technical aspect, let’s now turn our focus back on its critical delivery, the infrastructure.  

The Infrastructure

I know for many of us when we talk about infrastructure we first think about the hardware, but infrastructure in the ISP business goes beyond just routers and switches or CPEs.
When you are looking at setting up an ISP the first thing to think about is the real-estate. Yes, that is a very crucial piece in the success of any ISP business. By real-estate we are talking about the shelter, the building that will host your valuable hardware. Because telecommunication gears are very costly and serve a highly demanding population you don’t want to trust your real-estate to just anybody. When looking for a place to set up your ISP business you should consider whether or not the area is a secure place, this is very important because you definitely don’t want to be victim of a theft, as we mentioned early the ISP as a business will have customers walking in and as a business owner you want your customer to feel as secure as possible when coming to your business, this also apply to your own employees, they need a secure environment to be able to work appropriately. Secondly it is very cost effective to build-in in the area where you expect to have the most customers, the closer your service is to them the better. Finally with the proliferation of Fiber Optic cable the closer your ISP business is from a fiber source the easier it is for you to use the existing fiber capacity.
Now let's assume you got yourself a nice piece of real-estate, now the question is to build it yourself or rent it? From my experience and from what I see I will advice to rent an office space rather than build it yourself, this applies mainly to the startup business for which I’m writing this note anyway. By so doing you can focus better on your core business, and leave the real-estate management to the renting company. But there can be instances where you will need to buy and build your own real-estate, such a case applies, for example to your base-station which you will be adding as your business grows.
By itself a real-estate is nothing to the ISP business even with all that we discussed so far, to become a valuable asset to the ISP business we need to build more features into our real-estate. One such feature is power availability. We have already did mentioned how crucial it is to keep telecommunication equipments running to deliver a reliable service to customers. One way to achieve this also will be to ensure a continuous power supply to the gear. This brings us back to our discussion about owing the building or renting it. If you are going to rent the building you have to make sure that the building owners provide a power backup solution, such as having a generator plant for the building. But even this solution alone is not sufficient to deliver the highest availability. You will also have to make sure all your crucial equipments are put on UPS system and if possible have your own generator as a backup system to the buildings own.
Now we have a real-estate and a good power system in place, let now look at the HVAC (Heating, Ventilation, Air conditioning). Another feature of a good ISP business is its HVAC systems, for the ISP equipments to operate normally you need to provide a proper HVAC system. When thinking of buying or renting an office space for an ISP business you should consider if the building already offer a good AC system or if you have to deploy your own AC. If the building owners offer this already as part of renting or buying the building you need to make sure that the existing HVAC system comply with you business requirements or you will still have to add your own HVAC system.
We are getting closer to what an ISP business should look like, now let add another layer, which is security. We’ve talk about security earlier on when we were discussing the real estate, but this type of security is a bit different, what we want to talk about here is how easy it is to get to the core devices and how this is all logged. Because you want to ensure the availability of your networking gears you definitely don’t want anyone just to walk in and have access to your equipments, so to avoid that you need to put on some kind of security to monitor who has access to what and what they do with that access.  You need some type of biometric device with ID card, a log book or authentication servers, and some CCTV cameras to achieve this type of security.
There is much more to it than we can possibly discuss here, but let leave it here and focus now on the network infrastructure itself.

The Network Infrastructure
An ISP business network infrastructure should be planned with growth and scalability in mind. Most ISP network start with very few customers but find themselves handling a much bigger customers communities as they are growing. To prevent profit loss and unavailability of your system it is best to start your ISP with appropriate modular equipments, and as the business grow you can add modules as required without changing the whole equipment.
By scalability we mean how your business will be able to sustain the increased number of customers and data flow. To achieve this we are going to use a network model design by Cisco, this model is called Cisco's three layer network topology (composite model). With this model Cisco has divided the network infrastructure in three layers, the access layer, the distribution layer and the core layer.

Let now talk about the Access layer.

The access layer is a major part of your network infrastructure deployment so it has to be design with care and expandability in mind. By access layer we mean the layer at which your users access your network, by users we mean your customers and your employees, usually because your employees are part of your cooperate environment we commonly call that type of access, LAN or Local Area Network, this is important to understand because the LAN is just one type of Access Layer block. Inside your LAN you can have another Access layer block for your internal servers that should not be accessed by outsiders. We will call that block the Server Farm block. The layer at which your customers join will be called Access Layer. So to summarize in this document we will call the customers access block, access block, the employees access block LAN and the internal servers access block Server Farm. We are going to focus in this document on the access block because as an ISP company your primary business is to provide internet access to your customers. There are various way customers can be connected to the cooperate network; here you can think of all the WAN technologies that you know, wireless as well as cables. When we are talking about wireless there are many standards we can mention such as GPRS, 3G, 4G, LTE, WIMAX, Microwave, EDGE, CDMA etc… for cables connection we can mention dedicated Point to Point line, such as E1, SDM, fiber optic etc… Any of these technologies can be used interchangeably but you have to make sure your access devices support any of these technologies.

Let now talk about the distribution and core layer.

In these document I’m going to use a special model to explain this because this document is intended for startup ISP’s, so one way to reduce cost for this new ISP is to collapse the distribution and core layer into one layer, that we will call collapse network model. The core is the bridge between all your access block, the access block itself, the LAN, the server farm and the perimeter network which is a special type of access layer block we will talk about shortly. As you can see the core of your network plays a very crucial role and need to be implemented with care and scalability in mind. Your core network must be very resilient and if possible redundant.  This is where you should place your big gears and equipments; minimum Cisco recommendation at this layer is a Cisco 3000 models router with at least a 32Mbps memory (Unit of memory bytes).

Now let talk about another type of access layer block called the perimeter network,

that’s your way out of your network, the interface between you and your upstream provider, at this layer you should also place some of your big gears because of the kind of services that might be running on them. These routers usually need bigger memory and processing power because of the BGP (routing) process they usually run and whether or not you are receiving the whole internet routing table or just a subset of it.
As an Internet Service Provider there is definitely some other service you may want to provide in addition to providing Internet connectivity such as web hosting services, mail services, name resolution services (DNS), file sharing service (FTP), in order to deliver these services the servers hosting these services should be accessible online. Earlier on we talk about the server farm block, but we said the servers on that block should not be reachable by external people, so the question is where should we place these servers that need to be reached over the internet? For those of you who thought about DMZ, that’s the correct answer, a Demilitarized Zone is a zone outside your cooperate network but behind your perimeter network, and it is usually located between two firewalls, the first firewall facing the perimeter network can allow specific traffic to reach the servers in the DMZ and the second firewall before your core router prevent any traffic that was not originated from within your LAN to come inside your cooperate network.
Let’s use a diagram to illustrate all these blocks:

Note that the firewalls are not always needed and can be implemented within the routers themselves.
There is much more technical details that goes into the network setup that cannot be cover by this document, for a more details technical overview feel free to visit the Cisco website for some best practices design and configurations guides.

Administration tasks
Aside setting up your physical connection, there are a number of administration tasks you will need to accomplish before your ISP is up and running such as registering your Autonomous Systems in the RIR (Regional Internet Registry) database, (for your information the African RIR is called AfriNIC. For more information you can visit their website at ). Aside registering your AS you also have to request for a pool of public IP addresses that will be needed for internet access.

We have reached to the end of this document and I hope the information above will be useful to you and will help you understand the ISP business, at least the infrastructure side. This document was written based on my personal experience and should be used as such.

Thank you.

Internet Peering Workbook
Cisco BCMSN Press Book

 by Quam E. Madjri



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