Local network

A regional Internet provider will sell its services to many local networks. A typical university, for example, will install its own campus-wide network to connect all campus computers together. The university bears the expense of stringing the wires and supplying the other necessary hardware and software. This campus network will then have a point of interconnection with a regional network, for which the university will pay (usually) a flat annual fee for the privilege of making the connection. As a result, local networks are paid for by the entity (university or business or other organization) that installs them. This local entity will contract and pay for a connection to a regional Internet network. The regional provider will then contract and pay for a connection to a Internet backbone network.