The ISP can take the traditional class B network (16 bits) it was assigned and subnet it is using, in this case, a 21-bit mask (255.255.248.0) to allocate blocks of class C networks (24 bits) to its customers as needed, and also minimize the amount of new routes required to reach each customer's network.
Of course, the ISP could follow similar logic to further subnet one or more of these networks blocks to accommodate even smaller customers.
Tip
Consider using one of the many subnet calculators freely available on the Internet. They often simplify the creation of a CIDR addressing scheme, and can at least serve to check your work.