Computers can share one Internet connection, whether it is a dial-up account, cable, ISDN, or DSL. Sharing eliminates the need for multiple services, and multiple phone lines for dial-ups. By allowing multiple computers to share a single connection, the bandwidth is divided between all of the computers, in other words; shared, allowing each of them to use it. Sharing the Internet connection doesn't increase bandwidth, all of the bandwidth is distributed between the computers. This means that while multiple computers are using a shared connection, each computer's total available bandwidth will be a fraction of what it would be on an unshared connection.

Internet sharing works well with all Internet and network connections, and is a perfect use for high speed services, like DSL, where one user has a hard time using all of the bandwidth by themself.

To have either gateway or proxy sharing, all of the computers have to be first networked together, for example using 10Base-T connections. With an existing network, one computer is put in charge of the Internet, and simply allows others on the LAN to use it.

A gateway is simply a router that will check each packet to see if it is a LAN packet, or a WAN packet.

Proxy connections can be made by either using hardware or software products. Hardware proxies are more oriented toward the business market, and software solutions are more for the average home user.

Hardware
Hardware proxies do not use a computer to operate a proxy, all work is done inside an intelligent hub. Features for hardware proxies include : Network Address Translating for connecting of dissimilar network protocols, DHCP which is used for dynamic IP configurations, DNS for server locations, and firewall securities for packet filtering. Many hardware solutions are not only an intelligent hub, but also have an integrated Internet connection device. This means the hub is not only a proxy server, but also a modem. This type of hardware proxy replaces the extra computer. The Internet connection, whether it is a phone line, cable line, or network cable can be plugged directly into the hub.

Software
Software proxies are much more economical than hardware proxies, and can support the same features as a dedicated hardware device. An example of a software proxy is Win98SE's Internet Connection Sharing. This is integrated into the Windows 98 Second Edition, and therefore free to use if you own that product. ICS supports basic firewall services, DHCP, DNS, and up to 254 users. There are other software products that can cache frequently used web pages to speed up the connection.