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I was wondering if this is possible.

Looking to connect PC1 to PC2 over regular internet, but for both of them to look like they are on the same ip network (192.168.1.xxx).

When I say regular internet, I mean your normal household DSL or DOCSIS connection, not a leased line etc...

I am thinking a VPN would be the way to go, but what providers? or are there alternative methods?

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VPN is the standard solution for this. In fact, most VPN protocols use the "Point to Point Protocol" (PPP) inside some kind of encrypted connection (the details of the outer encrypted connection varies from VPN protocol to VPN protocol).

No VPN service provider would be involved with this. You would just run whatever VPN client and server software you want to run. Pick one PC to be the VPN server and one to be the VPN client.

VPN service providers are for when you do NOT have your own VPN server to connect to, but you still want to make a VPN connection from your client. For example, when you want to get your client machine onto the Internet via an insecure public Wi-Fi hotspot, but you want to better protect its traffic from potential eavesdroppers, so you have it send all its traffic through an encrypted VPN tunnel to some far-off VPN ISP (where hopefully there are no eavesdroppers). So with a VPN provider you're basically renting access so you can connect your VPN client to their VPN server. But in your case that you're asking about, you own both ends of the VPN connection, so pick one PC to be the server and one to be the client.

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There are various free products that can create a Local Area Network (LAN) over the Internet.

Here is a list of such products in no special order:

I have used Hamachi years ago, before it became a product of LogMeIn, and it was just perfect. But I have no current experience today with any of these products.

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