The Three Tiers of ISPs: What They Mean & Why They’re Important

Has this ever happened to you?  You’re talking about the internet with your techy friends and you realize: a) “I don’t know what tiered ISPs are,” and b) “I don’t really know how the internet is structured.” Well, it isn’t just “a series of tubes” as one politician put it. No, a hierarchy of infrastructure exists, which many different commercial, community-owned, non-profit, and privately-owned organizations control.

Think of the vast, interconnected highway system that connects cities large and small across the United States. That complexity is similar to the information highway that makes up the backbone of the internet, except that instead of the government owning all of it, many entities are left to sort out all of the rules. They’re called internet service providers.

This type of multi-faceted system means negotiation is key. So, let’s go over how these ISPs decide to organize themselves.

Each tier corresponds to the level of IP Network Access.

Not sure what that means? Well, an ISP simply provides access for using the internet. Most ISPs own part of the physical network – think fiber, cables lines, etc. – while some do not. And those that do can leverage the size of their network to strike up deals with other ISPs. There are various arrangements for exchanging user traffic, but the three most critical categories are known as transit, peer, and customer.

  • Transit – Transit refers to the service of allowing network traffic to cross a computer network. In most cases, transit is paid for by smaller networks to achieve access to the rest of the internet.
  • Peer – Sometimes network owners see a mutual benefit in allowing each other access to their respective networks. This is referred to as a settlement-free exchange, meaning neither party has to pay for the exchange of traffic.
  • Customer – This is the most straightforward relationship. A network pays another network money, and receives internet access in return.

Any ISP may have a number of these types of arrangements at a given point. These relationships decide which tier they are categorized under.

Tier-1 carriers are the movers and shakers of the industry.

Carriers with Tier-1 networks can reach every other network on the internet via settlement-free peering. Basically, they own enough of the physical network lines to carry most traffic themselves, and negotiate with other Tier-1 networks to get free access to their networks, and vice versa.

You may wonder why they don’t charge each other money, as in a transit relationship. Well, the actual transit cost incurred by a particular provider is often roughly equal to that of another provider, and as a result, exchanging financial information is redundant. Some ISPs have a network peering policy that list other desired qualifications, e.g. similar geographic reach, or monetary stability.

Some world-renowned Tier-1 carriers include:

  • AT&T
  • CenturyLink
  • Deutsche Telekom
  • Sprint
  • Verizon

Tier-2 carriers peer with other networks, but also purchase IP transit for full access to the internet.

Carriers with Tier-2 networks are the most common internet service providers. They peer with other comparably-sized Tier-2 networks, but they’re obligated to purchase access to larger Tier-1 networks.

Just because an ISP is Tier-2 doesn’t mean that their internet service is less effective. In fact, most Tier-1 networks prefer to deal with larger clients, leaving Tier-2 networks to focus on regional consumer and commercial internet access. CTS Telecom is a Tier-2 internet provider offering reliable internet access across Southwest Michigan. You can bet we stack up to the competition.

Popular Tier-2 Carriers include:

  • Comcast
  • Virgin Media
  • Cox Communications
  • CTS Telecom

Tier-3 carriers strictly purchase IP transit.

When you hear people talk about net neutrality, this is why. Tier-3 carriers are usually last mile providers, meaning they connect consumers to the internet without a network of their own, servicing only the connection leading into your home or office. Content providers have little control over this part. As such, tier 3 ISP networks can be artificial congested, poorly maintained, or throttled.

To Find the Perfect Internet Solution for Your Business, Contact CTS Telecom Today.

Curious about what Tier-2 Internet Service Provider can do for you?  Schedule a free demonstration courtesy of CTS Telecom. We have an array of business internet services for all applications and budgets. And if you’re looking for an all-in-one solution, we offer colocation, voice, internet, IT services, and data transport. We invite you to discover how CTS Telecom can take care of your business’s needs. To get started, contact us today.

By | 2018-07-05T12:58:01+00:00 June 22nd, 2018|Fiber Optic Internet, Uncategorized|0 Comments

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