What is an Online Service Provider?

Jess Rhodes

An online service provider is an entity that offers a service via the Internet. This varies from the historical definition, which encompassed commercial communication service providers that connected users to the Internet while offering them personalized services. The current definition expands to include various online services, including online banking, shopping, and entertainment websites.

Online service providers offer services via the internet.
Online service providers offer services via the internet.

The historical definition of an online service provider used to distinguish between Internet access providers hosting their own individual sites and content from Internet service providers that simply connected users to the Internet. This historical definition only included Internet access providers offering such things as e-mail, news, and sometimes their own web browser. The definition then changed to include various Internet service providers without additional services, and through this transformation has reached its current scope.

Many retail outlets offer shopping through the Internet and mobile apps.
Many retail outlets offer shopping through the Internet and mobile apps.

The terminology has increased in importance and definition internationally due to the enhancement of copyright laws. In the U.S., for example, the term has expanded legally due to the Online Copyright Infringement Liability Limitation Act (OCILLA) section of the U.S. Digital Millennium Copyright Act. This act has included all Internet access providers to be considered online service providers as well as any provider of online services. By extending the definition to any provider, the scope of an online service provider has increased enormously.

Considering that any business that offers a service over the Internet is considered an online service provider, the current scope is vast, and service variations vary. Personal services offered by online providers include e-mail, e-banking, and information storage. Offering these services online has greatly increased the speed of communication and reduced the time spent on weekly administrative tasks. These benefits are accompanied by the drawbacks of information theft via enhanced potential for account access.

Entertainment and information sites are also considered online service providers. Online entertainment providers offer music, books, and video access, all of which vary in style and hosting methods. Service providers offering online information include news, search engines, and governmental sites. Benefits of these providers include widespread dissemination of knowledge and access to various information sources. Drawbacks include copyright violations, theft, and concerns about the accuracy of information dispersed.

Businesses offering online services can also encompass e-retail networks. An online store is also considered an online service provider. The benefits of having an online store can include savings on rent, storefront advertising, and employee salaries. Disadvantages can include frequent technology and website updating, a lack of traffic associated with brick and mortar establishments, and additional advertising costs to bring traffic to a website.

E-mail and e-banking are personal services offered by online providers.
E-mail and e-banking are personal services offered by online providers.

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