The statement is false because the word "always" is an absolute. While the default behavior of terraform init is to download providers from the public Terraform Registry over the Internet, Terraform explicitly supports several alternative installation methods that do not require an Internet connection. These methods are designed for use cases such as air-gapped environments or organizations that wish to use a curated set of private providers. Terraform can be configured to install providers from a local filesystem mirror, a network mirror on a private network, or an implied local mirror directory where pre-downloaded provider plugins are stored.

The "True" option is incorrect. It oversimplifies the provider installation process by ignoring the documented, officially supported mechanisms for offline and private provider distribution. The existence of alternatives like filesystem mirrors and the user plugins directory directly refutes the claim that providers are always installed from the Internet.

1. HashiCorp Terraform Documentation

"Provider Installation"

Section: "Filesystem Mirrors": This section explicitly describes how to configure Terraform to use a local directory as a source for providers

which is a common practice in environments without internet access. It states

"A filesystem mirror is a directory on the local filesystem which is laid out in the same way as a network mirror... This can be useful for air-gapped environments

or for forcing the use of a particular set of provider versions that have been approved by a local security policy." This directly contradicts the premise that providers are always installed from the Internet.

2. HashiCorp Terraform Documentation

"Provider Installation"

Section: "Implied Local Mirror Directories": This section details how Terraform automatically searches for provider plugins in specific local directories (e.g.

~/.terraform.d/plugins on Unix-like systems). This allows for manual

offline placement of provider binaries. The documentation notes

"Terraform will search these directories for provider plugins before consulting the configured installation methods." This is another official

non-Internet-based installation method.

3. HashiCorp Terraform Documentation

"CLI Configuration File"

Section: "Provider Installation": This document outlines the providerinstallation block

which can be used in a CLI configuration file to override the default installation behavior. It provides the syntax for configuring filesystemmirror and networkmirror methods

giving users explicit control to source providers from locations other than the public internet registry. The presence of these configuration options confirms that internet-based installation is not the only method.