There’s no modem needed, actually. All of that can be done in software, and you can configure a desktop as a PPPoE client (that’s the protocol your router uses to log into your ISP’s network and receive internet connectivity). Obviously, you’d need to configure that PC as a router for other computers to also share the connection, and running a typical interactive system 24/7 as a router is hideously inefficient in terms of power use.

I think you wonder whether your PC can be connected directly to the internet. Yes, like every server, router, firewall, technically you can. You would need to set up your connection completely manually, as there is no one doing that for you.

However, connecting millions of people is an epic task in itself. You would need at least as many public IP addresses as consumers have devices, and find a way to drag ethernet cables over enormous distances… while these won’t exceed about iirc 120m until signal loss is killing the connection. Then you would need all those consumers to have intricate network knowledge too.

Hence why we’re modems that can use long distance connections (like DSL over phone lines), that can arrange internal network connectivity without you having any knowledge, and apply internal IP space instead of public. Also your ISP can apply efficient internal routing and even internal IP space to save on rare and expensive public space.

There is much more to this, but I wanted to keep it ELI5. HTH!

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yes, we can.

but it’s a niche market so you have to diy

That’s actually more or less how it used to work. You’d plug your computer directly to the internet and connect that way. You’d have to dial into the internet. Constantly being online was a novelty. Especially when you paid by the minute. But then people started having more than one PC and thus home routers became a thing.