What Are IP Transit Services and How Do They Differ From Peering?

Choosing the right internet service is essential to enable wide internet reach at an affordable cost. There are several services available in the internet connectivity marketplace with IP transit services and IP peering services amongst top competitors. This post will not only explain what IP transit services are but also how they differ from peering services.

What is IP Transit Service?

An IP Transit refers to a service that allows network access to the entire internet via Border Gateway Protocol (BGP). It is a commercial service where one network service provides access to another comprehensive internet routing table in return for a certain payment.

As providers offer IP Transit service based on BGP, buyer networks require administering and operating their own Autonomous System (AS). Therefore, your organization and IT leaders need adequate knowledge of the routing and hardware required to run a flawless BGP.

IP Transit vs. Transport

The networks worldwide connect with each other via the Internet through the services provided by companies known as Internet Service Providers (ISPs). There are classifications for ISPs

• Tier 1 ISPs are known as transit providers as they are not only responsible for providing global internet connectivity but also offer internet access to other lower-level ISPs.
• Tier 2 ISPs enter into Service Level Agreements (SLAs) with other transit providers that allow them access to a part of internet transit services at pre-determined prices.

These ISPs charge their respective customers. An IP transit provider can further offer transit to other network providers operating in the country.

On the other end, IP Transport refers to the technical aspects of data transportation from one network to the other. For this, interconnection of networks needs a considerable level of technology and equipment. This is because your data transfer requires multiple networks containing myriads of networking devices.

Organizations can achieve this interaction via a structured IT framework with adequate networking protocols. These protocols enable secure passages for data packets to reach the desired destination. Another important aspect to remember is that you cannot send data in a single packet and it requires data to be broken into small fragments for transmission.

Therefore, IP transport relies on the quality of transmission medium to carry data physically from one destination to another. The most common mediums are the twisted-pair cable, co-axial cable, and fiber optics. However, each of these mediums has a fixed capacity to carry data, commonly known as bandwidth.

That said, both IP Transit services and IP Transport are cogs of the same wheel. Therefore, an organization will require a good combination of these services and equipment for data transmission to work efficiently.

How Does IP Transit Works?

An organization needs an internet connection for data to go from one network to another that is not always a part of the same internet provider’s infrastructure. Therefore, to successfully transmit and receive data via the internet, they need IP Transit to connect with the global internet web, and this is where IP Transit comes into play.

The IP Transit will allow the organization to access the wide network while providing a smoother and faster user experience while using the internet.

IP Transit Pricing

The IP transit pricing depends on the demand and usage of the organization and the desired tier. The IP transit service provider may charge on a usage basis or through a flat monthly fee.

The service providers will measure metered usage as megabit-per-second (Mbps) using the 95^th percentile methodology for billing. This way, organizations avoid paying for the top 5% internet usage, and the usage measurement occurs every 5 minutes to determine the usage.

That said, a flat-rate billing plan would be best for organizations with large data traffic. In this case, the service provider charges its users based on the speeds of their connection. The tier-based pricing can be flat rate also but depends on the bandwidth acquired by the organization.

What is Peering?

IP Peering is when two Internet Service Providers enter a mutual agreement to exchange data without charging each other. This is equally beneficial for both parties because the data shared from both sides is usually the same amount. Therefore, neither party has to charge a fee.

This is exactly the opposite of the IP Transit where one organization has to pay another to connect to the ISP. Therefore, the organization receiving payment is upstream and more in control than the one paying as a customer. In contrast, in IP Peering, both parties enjoy the same status and rights in the ISP hierarchy to access the internet.

What to Choose IP Transit or Peering?

For an organization comparing IP Transit vs. Peering, approaching this form from a lifecycle perspective would be adequate. This forces IT leaders to consider drivers such as data traffic levels to a particular destination.

Technically, it is best to look at the peering lifecycle from a routing standpoint, i.e., routes sent and received between all routing peers. As an organization progresses through a lifecycle, its destinations will become more defined, which in turn will help refine its routes.

However, an organization must be thoroughly diligent in maintaining routing symmetry as there could be multiple types of peering based on data traffic flow to specific destinations.

For instance, your company has IP transit and sends and receives all the routes from an ISP. For now, you do not have to worry about asymmetry. However, later you add a cloud-based web gateway, and suddenly, your traffic will then split between two providers. It will be a logical solution to establish IP peering relationships with your SWG provider.

On the other end, for IP Transit, an organization should look for another colocation partner offering a rich ecosystem of other providers. This will help them choose an IP transit at a lower cost to reach all desired internet destinations charged on an Mbps basis.

Let the Experts Help You!

HopOne, a CherryRoad company is the seasoned industry veteran in IP Transit and Peering Solutions. Our highly skilled and engaged team of professionals has over two decades of experience helping clients overcome their IT challenges. Get in touch today and let us help you determine the right routing solution suiting your organizational needs and budget.

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