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There are really just three types of equipment used for building the Internet, not counting your PC: Servers to store information for access, routers to intelligently deliver requests and line terminators which make sure the data gets from point A to point B.

Servers are computers dedicated to serving information on the Internet. These computers range from repurposed low-end PCs' to high end workstations with gigabytes of diskspace. There are many types of servers including: news, E-mail, web and domain name servers. It is possible for a single computer to act as an E-mail server at the same time it is a web server. Servers are often called hosts.

Routers are specialized computers whose main job is to remember best next hop for requests and data passing through. This is all done by storing IP addresses. Routers actually store logical maps of other routers and resources on the Internet and route data based on the shortest number of hops and traffic load. Routers have lots of memory. When they fail, neighboring routers simply send traffic along alternate routes.

Line terminators define a class of equipment which work in pairs to get information across the wires and fiber on the Internet. They operate in pairs because what one side encodes, the other end of the line must decode. Modems are the most common example of line terminators. When you dial into the Internet, there must be a receiving modem to complete your connection. Other line terminators include CSU/DSUs and ATM switches which transmit data at very high speeds.
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