Online Service Provider - History

History

The first commercial online services went live in 1979. CompuServe (owned in the 1980s and 90s by H&R Block) and The Source (for a time owned by The Reader's Digest) are considered the first major online services created to serve the market of personal computer users. Utilizing text-based interfaces and menus, these services allowed anyone with a modem and communications software to use email, chat, news, financial and stock information, bulletin boards, special interest groups (SIGs), forums and general information. Subscribers could exchange email only with other subscribers of the same service. (For a time a service called DASnet carried mail among several online services, and CompuServe, MCI Mail, and other services experimented with X.400 protocols to exchange email until the Internet rendered these outmoded.)

Other text-based online services followed such as Delphi online service, GEnie and MCI Mail. The 1980s also saw the rise of independent Computer Bulletin Boards, or BBSes. (Please note that online services are not BBSes. An online service may contain an electronic bulletin board, but the term "BBS" is reserved for independent dialup, microcomputer-based services that are usually single-user systems.)

The commercial services used pre-existing packet-switched (X.25) data communications networks, or the services' own networks (as with CompuServe). In either case, users dialed into local access points and were connected to remote computer centers where information and services were located. As with telephone service, subscribers paid by the minute, with separate day-time and evening/weekend rates.

As the use of computers that supported color and graphics, such the Atari 800, Commodore 64, Texas Instruments TI-99/4A, the Apple II series and early IBM PC compatibles, increased, online services gradually developed framed or partially graphical information displays. Early services such as CompuServe added increasingly sophisticated graphics-based front end software to present their information, though they continued to offer text-based access for those who needed or preferred it. In 1985 Viewtron, which began as a Videotex service requiring a dedicated terminal, introduced software allowing home computer owners access. In the early 1990s graphics based online services such as PlayNET, Prodigy, MSN, and Quantum Link were developed. (Quantum Link, aka "Q-Link," was actually based on Commodore-only Playnet software.) Q-Link, whose service was for Commodore computers only, developed AppleLink, PC-Link (based on Tandy's DeskMate), and Promenade (for IBM), all of which (including Q-Link) were later combined as America OnLine.

These online services presaged the web browser that would change global online life 10 years later. Before Quantum Link, Apple computer had developed its own service, called AppleLink, which was mostly a support network targeted at Apple dealers and developers. Later, Apple offered the short-lived eWorld, targeted at Mac consumers and based on the Mac version of the America Online software.

Beginning in 1992, the Internet, which had previously been limited to government, academic, and corporate research settings, was opened to commercial entities. The first online service to offer Internet access was DELPHI, which had developed TCP/IP access much earlier, in connection with an environmental group that rated Internet access.

The explosion of popularity of the World Wide Web in 1994 accelerated the development of the Internet as an information and communication resource for consumers and businesses. The sudden availability of low- to no-cost email and appearance of free independent web sites broke the business model that had supported the rise of the early online service industry.

CompuServe, BIX, AOL, DELPHI, and Prodigy gradually added access to Internet e-mail, Usenet newsgroups, ftp, and to web sites. At the same time, they moved from usage-based billing to monthly subscriptions. Similarly, companies that paid to have AOL host their information or early online stores began to develop their own web sites, putting further stress on the economics of the online industry. Only the largest services like AOL (which later acquired CompuServe, just as CompuServe acquired The Source) were able to make the transition to the Internet-centric world.

A new class of online service provider arose to provide access to the Internet, the internet service provider or ISP. Internet-only service providers like UUNET, The Pipeline, Panix, Netcom, the World, EarthLink, and MindSpring provided no content of their own, concentrating their efforts on making it easy for nontechnical users to install the various software required to "get online" before consumer operating systems came internet-enabled out of the box. In contrast to the online services' multitiered per-minute or per-hour rates, many ISPs offered flat-fee, unlimited access plans. These providers first offered access through telephone and modem, just as did the early online services providers. Today these independent ISPs have largely been supplanted by high speed and broadband access through cable and phone companies, as well as wireless access.

The importance of the online services industry was vital in "paving the road" for the information superhighway. When Mosaic and Netscape were released in 1994, they had a ready audience of more than 10 million people who were able to download their first web browser through an online service. Though ISPs quickly began offering software packages with setup to their customers, this brief period gave many users their first online experience.

Two online services in particular, Prodigy and AOL, are often confused with the Internet, or the origins of the Internet. Prodigy's Chief Technical Officer said in 1999: "Eleven years ago, the Internet was just an intangible dream that Prodigy brought to life. Now it is a force to be reckoned with." Despite that statement, neither service provided the back bone for the Internet, nor did either start the Internet.