Special thanks to the folks at Nexland for their assistance in preparing this article.


At the end of 2000, according to International Data Corp. (IDC), about half of all U.S. households had a computer, and more than 20 million of those had more than one computer. In fact, market research shows that current PC owners are buying most of the new computers. This means that multi-computer households are becoming pretty common.

If you are one these multiple-PC owners, you have probably thought about how great it would be if your computers could talk to each other. With your computers connected, you could:

  • Share a single printer between computers
  • Use a single Internet connection
  • Share files such as images, spreadsheets and documents
  • Play games that allow multiple users at different computers
  • Send the output of a device like a DVD player or Webcam to your other computer(s)

In this edition of HowStuffWorks, we'll look at all of the different methods you can use to create a home network. Be sure to read the companion articles about power-line networking, wireless networking and phone-line networking. This specialized information, including our own experiences with different networking solutions, can help you decide which method is right for your home.

Ways to Connect
You can connect your home computers in a variety of ways:

Each of these methods has advantages and disadvantages, and in this article we'll discuss them in detail. But all of these methods (except physically carrying diskettes) require you to configure your computers to share printers, files and an Internet connection and to set up some level of security. This configuration process is common to any form of networking, so that's where we'll start. We'll discuss how to set up sharing with Windows 98 and Windows Millennium, since they are the most common versions of the Windows operating system used at home. The procedure is different if you're using another version of Windows, but the basic information is still useful. We'll also give you some information on setting up a Mac network. For those of you using Linux, UNIX or other operating systems, you may prefer to skip the networking basics and go straight to the sections on the different networking technologies.

Once we establish a basic understanding of the configuration process, we'll discuss phone-line networking, power-line networking, Ethernet networking and wireless networking in detail. By the time you finish this series, you'll be able to choose the network technology that suits your needs and configure the whole thing!

Networking Basics
To install a network in your home, there are three steps:

  1. Choose the technology you will use for the network. The main technologies to choose between are standard Ethernet, phone-line-based, power-line-based and wireless. There are other technologies that exist, such as Token Ring and FDDI, but they are not recommended for use in a home network unless you already have extensive experience with that particular technology.
  2. Buy and install the hardware.
  3. Configure the system and get everything talking together correctly.

Step 3 is extremely important. It is also very educational -- if you understand the configuration process, you understand everything a home network is capable of doing for you. Some of the home-networking kits include an installation CD that makes configuration very easy.

The program will take you through each step of naming the computer, sharing files, sharing printers and sharing an Internet connection. But if you have problems, or if your kit does not include a configuration program, you'll need to know how to set it up manually. To assist you with setting up your network, we'll discuss the following tasks, which apply no matter which networking technology you choose:

  • Naming the PC
  • Sharing files
  • Sharing printers
  • Security
  • Sharing an Internet connection

Once you understand these tasks, you'll understand just what your new network can do!

Naming the PC
Before your computer can become part of a network, it has to have a name and a workgroup. Each computer in your home network needs to have a different name, and they all need to be in the same workgroup.


Here's how you can name your PC and create a workgroup:

  1. In Windows 98/ME, move the mouse pointer over the Network Neighborhood icon on the desktop and click the right mouse button once.
  2. Select Properties from the menu. The Network Properties window will pop up, listing information about the network adapter(s) and protocols installed on that computer.
  3. When the window opens, click the Identification tab. You will see three boxes (as shown above).
  4. In the first box, enter the name you wish to give the computer. You can name it anything, but each computer in your home must have a its own unique name.
  5. In the second box, enter the name you plan to use for the workgroup -- make sure all of the computers have the same workgroup name. You may want to write it down to make sure that you enter the exact same workgroup name on each computer in your network.

Now that we've got names and a workgroup, let's move on to file sharing.

Networking Basics: File Sharing and Security
One of the most common activities on any computer network is "file sharing." Windows 98/ME makes sharing files incredibly easy, and once you set it up, any computer on the network can share files with any other. To use file sharing, first check that File and Printer Sharing is enabled. You do this by running the mouse pointer over the Network Neighborhood icon on the desktop and clicking the right mouse button once. Select Properties from the menu. In the large white box, the item "Client for Microsoft Networks" should be visible.


Sometimes the software required to make a computer a client of a particular type of network isn't loaded. When a computer is a "client" of a network, that computer can communicate and share information with other computers that are clients of the network. When you first set up networking on a Windows 98/ME computer, the set-up process normally adds the "Client for Microsoft Networks" software. Occasionally it doesn't. If that's the case:

  1. Click Add in the Network Properties window.
  2. Choose Client from the list of choices in the window that pops up.
  3. Click Add. You will see a list of different companies or vendors on the left pane (side) of the window.
  4. Click Microsoft in that left pane. This will bring up a list of Microsoft's software clients in the right pane.
  5. Choose Client for Microsoft Networks from the list and click OK. Windows will copy all of the necessary files and may prompt you for the Win98 CD. If so, insert the CD and continue.

Once the software is installed, you should be back to the original Network window. Now let's enable file sharing:

  1. Click the button labeled File and Print Sharing...
  2. You will see two options, one for sharing files and the other for sharing printers. Click the box next to each option to enable it.
  3. Once it is enabled, you will see a checkmark in the box. Click OK to close the sharing-options window.
  4. Click the Access Control tab near the top of the Network window. For easier control of who can access which files, click the box beside Share-level Access Control.
  5. Click OK to close the Network window.

You must now select which folders you want to share. Sharing your entire hard drive is not recommended. It is too easy for someone to accidentally delete an important system file if the whole disk is shared. Instead, create folders that will be used specifically to share files. You may want one folder for the entire family and another one limited to you and your spouse. Once you have identified the folder(s), move the pointer over the folder and click the right mouse button to get the pop-up menu. Select the Sharing... menu item. A window will open with several options. The default choice for sharing is Not Shared. Change this to Shared As and type in a name for the shared folder. The "Shared As" name does not have to be the same as the name of the folder, but it makes it easier to remember if it is.


If you activated Share-level Access Control, you need to select the level of access and supply a password. Read-only access means that anyone accessing this folder over the network can only look at or retrieve files. They cannot put new files in the folder or delete or modify existing files. Full access is just that: the ability to read, write, delete and create files in this folder. You can also choose to allow either type of access depending on which password is provided.

Restricting access to certain files is crucial for most businesses and can certainly be important to you at home. For example, you may have documents or images that you would not want your children to be able to see or change. Or perhaps you have important financial information that you wish to keep private. Whatever the reason, it is useful to be able to restrict access to information on each computer through the use of share-level password protection. Also, you can implement the user log-on feature by creating individual user accounts in the Users window, which is in the Control Panel.


Once shared folders are set up, accessing them is simple. Double-click Network Neighborhood with the left mouse button to open up a window showing all computers in the local area network (LAN). Double-click the computer you wish to access. A window will open with a list of shared resources. Double-click the desired folder and a prompt will appear, asking for the password. Type in the password you designated for that folder, and you're connected to that folder!

Networking Basics: Printers
To share a printer, first make sure you have completed the steps outlined above to activate File and Printer Sharing. Then:

  1. Click the Start button, move to Settings and select Printers. A window will open listing all of the printers on the local system.
  2. Move over the icon for the printer you wish to share and click the right mouse button to bring up the menu. Select Sharing...
  3. The Properties window will pop up with the Sharing tab section open. Click the Shared As option and type in a name for the printer. You may also elect to require a password to access the printer.
  4. Click OK to close the window. This printer is now shared.


To access the printer from another computer:

  1. Go to that computer and open the Printers window.
  2. Double-click the Add a Printer wizard.
  3. Choose the Network Printer option and click Next.
  4. The wizard will display a list of all shared printers on the LAN. Choose the printer you wish to access and click Next again. The wizard will then install the appropriate driver if it is available, or else request that you put in a disk or CD with the driver software.

Once the wizard finishes installing the software, the printer will appear to your system just like a local printer.

Networking Basics: Internet
Microsoft recognized the growing popularity of home networks and implemented Internet Connection Sharing (ICS) in Windows 98. ICS lets you connect one computer to the Internet by whatever means (modem, DSL, ISDN or cable) and share that connection with any other Windows 98/ME computer on the network. Though simple in theory, the actual implementation of ICS has proven problematic for many users. Windows 98 Second Edition, as well as Windows ME, has an improved version of ICS that uses a Microsoft wizard application to guide you through the process.


By default, the ICS components are not installed on your computer. You only run ICS on the computer that is actually connected to the Internet:

  1. Go to the Control Panel and double-click Add/Remove Programs.
  2. Select the Windows Setup tab and open the Internet Tools option.
  3. Enable the Internet Connection Sharing component by clicking on the box next to it and then clicking on OK.
  4. Once the ICS components are installed, the ICS wizard will pop up. Follow the prompts and keep clicking Next. If your Internet connection is not already configured on this computer, the wizard will open the Internet Connection Wizard (don't get these two wizards confused!) so that you can set up an Internet connection. Simply follow the prompts. When you're done, you'll be returned to the ICS wizard.
  5. The ICS wizard will gather some information and prompt you to insert a 3.5-inch diskette. This diskette will then be used to configure the other Windows 98/ME computers on your network for Internet access.

While file and printer sharing are still relatively easy on other operating systems, Internet-connection sharing using only software is a good deal trickier. In most cases, you will need to configure a router or gateway that will bridge between the Internet and your home network. Even with Windows 98/ME, you may want to set up a hardware router to share your connection. In the next section, we will discuss a piece of equipment that is a useful part of many home networks: the cable/DSL router.

Routers and Firewalls
Some new hardware devices combine a router, a firewall and an Ethernet hub into one small package. A good example is the Nexland ISB SOHO. It is a cable/DSL router with a built-in, four-port, 10/100-megabits per second (Mbps) Ethernet hub and support for up to 8 megabytes (MB) of bi-directional throughput (sends data both ways) at a time. Computers in your home network connect to the ISB, which in turn is connected to either a cable or DSL modem. You configure the ISB via a Web-based interface that you reach through the browser on your computer. These combination units that include a router, firewall and Ethernet hub for broadband connections can be found for well under $200.


Nexland's ISB SOHO is an inexpensive cable/DSL router with lots of features.

Much of the work required to get information from one computer to another is done by routers -- they're the crucial devices that let information flow between, rather than within, networks. Routers are specialized computers that send your messages, and those of every other Internet user, speeding to their destinations along thousands of pathways. When information needs to travel between networks, routers determine how to get it there. A router has two separate but related jobs:

  • It ensures that information doesn't go where it's not needed. This is crucial for keeping large volumes of data from clogging the connections of "innocent bystanders."
  • It makes sure that information makes it to the intended destination(s).

In performing these two jobs, a router is extremely useful in dealing with two separate computer networks. It joins the two networks, your home network and the Internet in this case, passing information from one to the other. It also protects the networks from one another, preventing the traffic on one from unnecessarily spilling over to the other. Regardless of how many networks are attached, the basic operation and function of the router remains the same. Since the Internet is one huge network made up of tens of thousands of smaller networks, routers are an absolute necessity. For more information, see How Routers Work.

Whether you are one of the growing number of computer users with fast, always-on Internet access or you're still using a dial-up connection, you may want to consider implementing a firewall. A firewall is simply a program or hardware device that filters the information coming through the Internet connection into your private network or computer system. You use a firewall to protect your home network and family from offensive Web sites and potential hackers. If an incoming packet of information is flagged by the filters, it is not allowed through.

You should note that some spam is going to get through your firewall as long as you accept e-mail. And, while some firewalls offer virus protection, it is worth the investment to install anti-virus software on each computer.


The level of security you establish will determine how many threats can be stopped by your firewall. You can restrict traffic that travels through the firewall so that only certain types of information, such as e-mail, can get through. The highest level of security would be to simply block everything. Obviously, that defeats the purpose of having an Internet connection. But a common rule of thumb is to start out blocking everything, and then begin to select what types of traffic you will allow. This is a good rule for businesses that have an experienced network administrator who understands what the needs are and knows exactly what traffic to allow through. For most of us, it is probably better to work with the defaults provided by the firewall developer unless there is a specific reason to change them.


Some routers, such as Nexland's Pro800 series, include additional filtering software and even provide clients for creating a virtual private network (VPN).

Hardware firewalls are incredibly secure and not very expensive. One of the best things about a firewall from a security standpoint is that it stops anyone on the outside from logging onto a computer in your private network. While this is a big deal for businesses, most home networks will probably not be threatened in this manner. Still, putting a firewall in place provides some peace of mind. For more information on firewalls, see How Firewalls Work.

Building a Network
You've learned how to make your computer recognize other computers in its network and begin sharing printers, files and an Internet connection. We'll now look closely at four types of home computer networks -- how each works, what each costs and what the pros and cons are. The options we will discuss are:

Ethernet Networking
Ethernet is easily the most popular networking system available today. It is also one of the widest ranging systems. The equipment needed for an Ethernet-based network can be as simple as two network interface cards (NIC) and a cable, or as complex as multiple routers, bridges and hubs. It is this versatility that makes it so useful to businesses. We will focus on the basics for creating a home network.

Pros and Cons
Ethernet has many advantages:

  • It is the fastest home-networking technology (100 Mbps).
  • It can be inexpensive if the computers are close to one another.
  • It is extremely reliable.
  • It is easy to maintain after it is set up.
  • The number of devices that can be connected is virtually unlimited.
  • There is a great deal of technical support and information available.

And a few disadvantages:

  • If you have more than two computers, you'll need additional equipment.
  • It can be expensive if wiring and jacks need to be installed.
  • Set-up and configuration can be difficult.
  • The technical jargon and the number of options can be confusing.

Go on to the next page for complete information on this networking technology.

What You Need for Ethernet
Ethernet is available in two speeds: 10 Mbps and 100 Mbps. Most NICs are capable of operating at either speed, but you should check to be sure before purchasing. Get cards capable of the 100-Mbps data rate -- the difference in cost is minimal. A 10-Mbps card costs about $15 to $40, and a 10/100-Mbps card costs about $25 to $50.

There are two different ways to connect Ethernet cards: coax and Cat 5 cabling. Coax was once the more popular of the two, but today just about everyone uses Cat 5 because it is easier to configure. Cat 5 has a cable that looks a lot like a telephone cable. You run one cable to each computer, and each cable connects to a hub at the other end. A basic hub for a home network is a small box that typically costs from $30 to $100 (depending on its speed and how many connections it can support).


To connect more than two computers using Ethernet, you will need a hub like this.

The hub takes the signal from each computer and sends it to all of the other computers in your home. Hubs come in several sizes, noted by the number of ports available -- a four-port hub can connect four computers, an 8-port hub can connect up to eight computers and so on. Most hubs are stackable. A stackable hub has a special port that can connect it to another hub to increase the capacity of your network. So if you start with a four-port hub but eventuallyhave five computers, you can buy another four-port hub and connect it to the one you already have, increasing the potential number of computers on your network. A cable/DSL router usually has a four-port Ethernet hub built in.

To connect the computers, you will need Unshielded Twisted Pair (UTP) Category 5 cable. This type of cabling is designed to handle the 100-Mbps speed needed by Ethernet. The RJ-45 connector at the end of the cable looks very similar to the RJ-11 connector on a phone cord but is slightly bigger (and not compatible). You can buy Cat 5 cables in predetermined lengths with the connectors already attached. If you plan to install the Cat 5 cabling in the walls of your house, you can buy the cable in rolls, cut it to length and connect the cable to special RJ-45 wall boxes. Unless you have done this type of installation before, you will probably want to hire a professional.

Because of the large number of possible configurations in an Ethernet network, you most likely will not have any type of automated installation software. This means that you will have to manually configure all the options as we discussed at the beginning of this article. If you have problems, the best source of information is probably the manufacturer of whichever NIC cards you decide to use. For more information, see How Ethernet Works.

If you don't mind running the cables along the floor, you can install an Ethernet network for two computers in your home for $100 or less. That includes the cost of two Ethernet cards, a small hub and two cables. Each additional computer will cost about $30 to $40 to connect using inexpensive network cards.

*Note: If you want to connect just two computers, you can avoid the hub and use a crossover Cat 5 cable. With a crossover cable, you directly connect one NIC card to the other without a hub. This only works for two computers -- to connect more than two you need a hub.

Other Types of Home Networks
Besides Ethernet, there are three other networking technologies we'll discuss: power-line, phone-line and wireless networks. Click on the title below to go to the article for more information, or proceed to either A Word About Macs or The Future of Home Networking.

A Word About Macs
Configuring a Mac is a little bit different from a Windows machine. Most Macs have built-in Ethernet. Here's how to set up a Mac-only home network:

  1. Connect the computers - Make the physical connection using a crossover cable between two Macs or through a hub, router or Apple Airport. Note that gigabit-Ethernet Macs do not need a crossover cable. They sense the connection type and adapt to it.


  2. Name each computer - Create a computer name, user ID and password in the File Sharing control panel on each computer. Sharing must be enabled for the other Macs on the network to access the one you configure.


  3. Configure AppleTalk - In the AppleTalk control panel, set AppleTalk to connect via Ethernet using the built-in Ethernet connection or an Ethernet card. At this point, you're done. There is no need to restart your computer. The network should be available through the Network Browser (Apple Menu) or through the AppleTalk icon in the Chooser (Apple Menu).

While Macs configured this way can coexist on the same network as Windows machines, they will not see each other. There are ways to create a hybrid network between Mac and Windows computers. You can install software such as Virtual PC, Real PC or DAVE on each Mac so that it can access Windows computers on the same network. Likewise, you can install PC MacLAN or similar software on your Windows computer to access Macs and Mac printers on the network.

If you have a fast Internet connection (cable or DSL), make sure you set up a cable/DSL router (check this page to learn about routers) and connect each Mac to it. Choose DHCP in the TCP control panel, and you're set.

The Future of Home Networking
Home networking is really just beginning to hit its stride. Many of the homes being built today include Cat 5 wiring as part of the basic infrastructure. Highly specialized networking products that are proprietary in nature (like IBM's Home Director) are also available options. A lot of companies are focusing significant resources on developing new networking technology. HomePlug is working on increasing the data rate of power-line networking. HomeRF is developing a SWAP version 2 specification that will greatly increase the speed of wireless networking. Another wireless standard, HiperLAN2, is based on the IEEE 802.11a specification and offers speeds up to 54 Mbps in the 5-GHz range! One thing is for sure, home networks will continue to improve and grow.