1 If access is allowed, authentication completes and the resources are available to the user.  If access is not allowed, IIS will attempt to use another authentication method. If none is selected, IIS returns an HTTP 403 Access Denied error message to the browser.
https://msdn.microsoft.com/en-us/library/ee825205(v=cs.10).aspx
You can change the account that is used for Anonymous authentication in the IIS snap-in, either at the Web server service level, or for individual virtual directories and files. The anonymous account must have the user right to log on locally.
https://msdn.microsoft.com/en-us/library/ee825205(v=cs.10).aspx
To use Basic authentication, grant each user the right to log on locally. For easier administration, add each user to a group that has access to the necessary files. Enabling Basic authentication does not automatically configure your Web server to authenticate users.
http://www.microsoft.com/technet/prodtechnol/WindowsServer2003/Library/IIS/abbca505-6f63-4267-aac1-1ea89d861eb4.mspx
By default, Basic authentication requires the Windows user account to have local logon rights at the Web server. If you use the default setting, IIS caches credentials during logon, which slows the logon process.
https://msdn.microsoft.com/en-us/library/aa292114(v=vs.71).aspx
An important part of many distributed applications is the ability to identify someone, known as a principal or client, and to control the client's access to resources. Authentication is the act of validating a client's identity.
https://msdn.microsoft.com/en-us/library/aa292114(v=vs.71).aspx
IIS 6.0 Documentation > IIS 6.0 Operations Guide > Security in IIS 6.0 > Authentication in IIS 6.0. The Basic authentication method is a widely used, industry-standard method for collecting user name and password information. Basic authentication transmits user names and passwords across the network in an unencrypted form.
http://www.microsoft.com/technet/prodtechnol/WindowsServer2003/Library/IIS/abbca505-6f63-4267-aac1-1ea89d861eb4.mspx
For information about setting up Basic authentication, see Enabling and Configuring Authentication in the IIS 5.0 Online Documentation. The advantage of Basic authentication is that it is part of the HTTP specification, and is supported by most browsers. The disadvantage is that Web browsers using Basic authentication transmit passwords in an unencrypted form.
https://msdn.microsoft.com/en-us/library/ee825205(v=cs.10).aspx
IIS implements Basic authentication, which is part of the HTTP 1.0 specification, using Windows user accounts. When using Basic authentication, the browser prompts the user for a user name and password. This information is then transmitted across HTTP where it is encoded using Base64 encoding.
https://msdn.microsoft.com/en-us/library/aa292114(v=vs.71).aspx
Basic Authentication in IIS 6.0 (IIS 6.0) The Basic authentication method is a widely used, industry-standard method for collecting user name and password information. Basic authentication transmits user names and passwords across the network in an unencrypted form.
http://www.microsoft.com/technet/prodtechnol/WindowsServer2003/Library/IIS/abbca505-6f63-4267-aac1-1ea89d861eb4.mspx
If the digest created by the server matches the digest created by the client, IIS authenticates the client. IIS uses a subauthentication DLL (iissuba.dll) to authenticate the user, resulting in a network logon. By itself, Digest authentication is only a slight improvement over Basic authentication.
https://msdn.microsoft.com/en-us/library/aa292114(v=vs.71).aspx
what is basic authentication iis
Basic authentication Internet Information Services is a widely used, industry-standard method for collecting user name and password information. The basic authentication  Internet Information Services  is a widely used, industry-standard method for collecting user name and password information.