service industry

An online service provider is inclusive to internet service providers and web sites, such as Wikipedia's or Usenet (commonly accessed through Google Groups). In its original more limited definition it referred only to a commercial computer communication service in which paid members could dial via a computer modem the service's private computer network and access various services and information resources such a bulletin boards, downloadable files and programs, news articles, chat rooms, and electronic mail services. The term "online service" was also used in references to these dial-up services. The traditional dial-up online service differed from the modern Internet service provider in that they provided a large degree of content that was only accessible by those who subscribed to the online service, while ISP mostly serves to provide access to the internet and generally provides little if any exclusive content of its own. In the U.S., the Online Copyright Infringement Liability Limitation Act (OCILLA) portion of the U.S. Digital Millennium Copyright Act has expanded the legal definition of online service in two different ways for different portions of the law. It states in section 512(k)(1):

(A) As used in subsection (a), the term "service provider" means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received.
(B) As used in this section, other than subsection (a), the term "service provider" means a provider of online services or network access, or the operator of facilities therefor, and includes an entity described in subparagraph (A).

These broad definitions make it possible for a large number of web businesses to benefit from the OCILLA.


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, Commodore, Texas Instruments' TI99-4a, Apple //e and early Microsoft-based PCs, 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 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 targeted mostly at Apple dealers, developers, and Mac computer consultants. Later, Apple offered the short lived eWorld, targeted at Mac consumers. E-World's initial interface was almost identical to the Mac-Only version of America OnLine.

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 invention of the World Wide Web in 1993 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. Services like AOL (which later acquired CompuServe, just as CompuServe acquired The Source) were able to make the transition to the Internet-centric online--now Web--world. Others were not.

A new class of online service provider appeared to provide access to the Internet, the internet service provider or ISP. As the internet became popular, many ISPs began offering flat-fee, unlimited access plans. These providers first offered access through telephone and modem, just as did the early online services provides. This method has gradually 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 is hard to overstate, though it is often overlooked when the "history of the Internet" is discussed. For instance: when Mosaic and then Netscape were released in 1994, they had a beta test population of more than 10 million people in all walks of life, in business and education, far beyond the famous "early adopters," and they were located all over the world. This brief period demonstrated the unprecedented power of personal information networking that continues to flower along the World Wide Web.

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.

Online service Interfaces

The first online service utilized a simple text-based interface in which content was largely text only and users made choices via a command prompt. This allowed just about any computer with a modem and terminal communications program the ability to access these text-based online services. Compuserve would later offer, with the advent of the Apple Macintosh and MS Windows-based PC’s, a GUI interface program for their service. This provided a very rudimentary GUI interface. Compuserve continued to offer text-only access for those needing it. Online services like Prodigy and AOL developed their online service around a GUI and thus unlike CompuServe's early GUI-based software, these online services provided a more robust GUI interface. Early GUI-based online service interfaces offered little in the way of detailed graphics such as photographs or pictures. Largely they were limited to simple icons and buttons and text. As modem speeds increased it became more feasible to offer images and other more complicated graphics to users thus providing a nicer look to their services.

Common resources provided by online services

Some of the resources and services online services have provided access to include message boards, chat services, electronic mail between members and sometimes other online services, file download services, current news and weather, online encyclopedia, airline reservations, and text-based online games. Major online service providers like Compuserve also served as a way for software and hardware manufacturers to provide online support for their products via forums and file download areas within the online service provider's network. Prior to the invention of the world-wide-web, such support either had to be done via a private Bulletin board system run by the company or via online services or both.


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