ISP interconnection and tier-1/2/3 ISPs

ISPs and how they are interconnected

An Internet Service Provider (ISP) is an organisation that sells Internet access (and related services such as e-mail, hosting and DNS) to homes, businesses and other ISPs. No single ISP covers the whole world, so thousands of ISPs, each running its own Autonomous System (AS), are joined together to form the Internet. A customer of any ISP can reach a customer of any other ISP because the ISPs are interconnected in two main ways.

1. Transit (customer-provider): a smaller ISP pays a larger ISP to carry its traffic to the rest of the Internet. Money flows from customer to provider.
2. Peering (settlement-free): two ISPs of similar size connect directly and exchange traffic only for their own customers, usually without paying each other.

Interconnection takes place at the following points and through these arrangements:

• Points of Presence (PoPs): buildings where an ISP keeps routers and where customer ISPs connect.
• Internet Exchange Points (IXPs): a shared switch fabric where many ISPs peer with each other, e.g. NPIX in Nepal. This keeps local traffic local and reduces transit cost.
• Multihoming: an ISP buys transit from two or more providers for reliability.

The routing information between ISPs is exchanged using BGP-4, and each ISP is identified by an AS number.

        Tier-1 ISP  <---peer--->  Tier-1 ISP
          /     \                 /     \
     Tier-2    Tier-2 <--peer--> Tier-2   ...
      /   \       |                |
  Tier-3 Tier-3 Tier-3          Tier-3
    |      |      |                |
  Users  Users  Users            Users
 (lines going up = paid transit, <--> = peering)

Tier-1, Tier-2 and Tier-3 ISPs

Distinguishing feature: a Tier-1 ISP can reach every network on the Internet without buying transit; a Tier-2 ISP buys transit for part of the Internet; a Tier-3 ISP depends on upstream providers for all of it and mainly provides access to end users.