What is IP Transit? A beginner's guide to network

IP Transit

We all know that the magic of the Internet is how you can scroll on your phone and view the latest news from the other side of the globe. But do you know how exactly that works?

In this article, IPTP Networks shall reveal one of the secrets that allows the Internet to function – IP Transit.

How the Internet works

A network is made up of a cluster of connected devices that can communicate with each other. In order to connect with every device on the planet, the Internet is not just one big network but is a series of multiple networks combined together.

IP Transit allows traffic to transit over one or many ISP network(s) to reach the Internet.
IP Transit

For any information to get sent or received on the Internet, it needs to be split up into tiny packets of data, and sent over one or multiple interconnected network(s), before being put back together at the final destination.

When the interconnected networks agree on an arrangement for exchanging data traffic, the data packets can move from point A to point B across the Internet. One of the most common types of arrangement is IP Transit.

What is IP Transit?

IP Transit definition

Data packets must pass, or in-network terms – transit, through a series of third-party networks before arriving at the targeted location.

IP Transit is a service where an Internet Service Provider (ISP) allows traffic to travel over their network to get to the rest of the Internet. IP Transit service uses the BGP protocol to provide network access to the whole internet. In other words, an IP Transit customer shall pay the IP Transit service provider to gain access to the provider’s extensive BGP Internet routing table.

IP Transit allows traffic to transit over one or many ISP network(s) to reach the Internet.
IP Transit allows end user to cross the ISP’s network and access the entire Internet.

IP Transit is available to those that possess an Autonomous System and can establish routing using the Border Gateway Protocol.

Autonomous System (AS) / Autonomous System Number (ASN)

Autonomous System (AS) represents an ISP or a large organization with independent connections to other networks. Each AS has a unique registered Autonomous System Number (ASN) as an identifier to communicate with other AS’s.

For example, IPTP Networks is an AS with the ASN 41095, and our network connects to our customers and other ASes around the globe.

Only those operating their own AS, or in other words, possess an assigned ASN, are qualified for IP Transit service.

Border Gateway Protocol (BGP)

IP Transit service is based on Border Gateway Protocol (BGP). BGP is used by AS to interact with one another and allow IP transit to happen via reachability information.

In order for ASes to form a connection and exchange traffic, they use BGP to announce the reachability information, including two lists with IP addresses controlled by the sender AS and the receiving AS. BGP determines the best path to forward a data packet and directs which route it should take to reach its destination.

IP Transit lets customers access the Internet via Border Gateway Protocol (BGP).
IP Transit is BGP-based service that provides full BGP Internet table

Without ASN and BGP, exchanging internet traffic across these big networks would be impossible.

Tiers of IP Transit Providers

IP transit providers (ISPs) are set into three tier levels based on their capabilities.

  • Tier 1 ISPs are the Internet’s backbone and have a global footprint. They don’t pay for transit and peer (connect and exchange data) with one another for free. Tier-1 networks connect Tier-2 and Tier-3 (lower tier) ISPs, and they charge lower tier ISPs a ‘transit fee’ to use their networks.

  • Tier 2 ISPs have extensive networks of either regional or national reach. Only a few Tier 2 ISPs are capable of serving consumers across many continents. Tier-2 providers peer with other Tier-2 to minimize IP transit costs, but they must still purchase IP transit from Tier-1 ISPs to reach the rest of the Internet.

  • Tier-3 ISPs are regional service providers whose networks cover a few nations or subregions. Tier 3 ISPs only buy Internet traffic. To avoid the high costs of Tier-1 IP transit, they frequently purchase IP transit from Tier-2 providers. Tier-3 ISPs usually don’t have any transit clients and are generally concerned with the local corporate and consumer markets.

The ISP hierarchy classifies those with higher Tier as Upstream and those with lower Tier as Downstream. For instance, when the traffic flows from a Tier-3 to a Tier-2, it is moving upstream. In this case, the ISP with a lower Tier (Tier-3) is a downstream provider buying IP Transit service from the Tier-2 ISP – an upstream provider. ISPs with similar Tier, for example, Tier-1 and Tier-1 ISP, are peer partners.

How does IP Transit works

IP Transit connects a customer’s network to the Internet and provides a clear path for the traffic to arrive at its destination. The customer pays a transit fee to connect to a place – usually known as a POP (Point of Presence) – from the provider. The provider will then make sure the customer can access any server on the Internet, as well as all Internet servers, can now access that customer’s server.

The IP transit service is typically priced per megabit per second per month. An SLA (Service Level Agreement) is generally included with the IP Transit service. The SLA specifies the service quality and reimbursement terms in the event that a customer is unable to access the Internet for an extended length of time.

Depending on the network size and tier, the provider will need to pay for one or bigger networks to flow the customer’s traffic to the desired destination via their upstream transit.

IP Transit vs IX Transit vs MPLS vs DIA – What to choose?

Besides IP Transit, there are three other connectivity services to provide Internet access: IX transit, MPLS and DIA.

Most common types of connectivity service are IP Transit, peering, and DIA
There are three Internet connectivity services: IP Transit, IX Transit (Peering via Internet Exchange Point IXP), MPLS and DIA (Direct Internet Access)

IX transit is a type of public peering service via the Internet Exchange Point (IXP). An IXP serves as a point of connection where ISPs’ networks can connect and exchange Internet traffic. IX transit is a partial IP Transit that allows traffic to reach peers and downstream ISPs’ networks for optimal latency.

MPLS (Multi-Protocol Label Switch) is a dedicated Layer 2 connectivity service. L2 MPLS provides private paths to connect your global premises with increased network efficiency, QoS (Quality of Service), CoS (Class of Service), high speed, and security. Thus, it’s more expensive than IP Transit.

DIA – which stands for Direct Internet Access – works in the same way as IP Transit. DIA is the most common internet service for those that do not possess an ASN. Comparing DIA to IP Transit, it is a much cheaper choice. However, the downtime period and quality of DIA leaves much to be desired.

Budget, number of peers, as well as your level of latency dependence are some of the factors you may consider regarding whether to choose IP Transit, IX Transit, L2 MPLS or DIA.

If you do not have an assigned ASN and only look for simple and cheap Internet service for general purposes, DIA would be the ideal choice.

IX Transit suits those that use latency-sensitive apps and prefer to be hands-on with their traffic routing and network optimisation within a limited budget.

L2 MPLS is recommended for large companies with multiple offices who need a private, dedicated, and secure network.

For your business to reach out and connect with any business anywhere in the world, IP Transit is a must, no matter the method you prefer to access the Internet.

Let IPTP Networks help your connectivity decision!

Need more guidance on choosing the right Internet Access service for your business?

Our team of experts is ready to help with your network needs. Contact IPTP Networks via our Live Assistant or email us at to gain valuable advice on how our IP transit service can help your business!

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