HomeWhat is IP transit?

What is IP transit?

What is IP Transit?

IP Transit, or Internet Transit, is a networking service offered by Internet Service Providers (ISPs) that allows networks to connect to the rest of the internet. It enables the passage of network traffic from one network to another through the ISP’s network, reaching every part of the global internet.

IP Transit can be succinctly defined as:

A service that enables network traffic to transit through an ISP’s network to connect to the broader internet, ensuring access to global online resources and services.

How IP Transit Services Work

IP transit services operate on the backbone of the internet, leveraging a complex system of interconnected networks. The key components include:

  • The Internet: A global network of networks, where data is transmitted across various paths to connect different entities worldwide.
  • Public Networks: Networks accessible by the general public, where services and information are hosted.
  • Autonomous Systems (AS): Large blocks of networks under a common management, identified by an Autonomous System Number (ASN), which is crucial for routing decisions.
  • Border Gateway Protocol (BGP): The protocol that manages how data is routed across different ASes, determining the most efficient path for data packets to reach their destination.

The process involves an ISP using its network and peering agreements with other ISPs to transmit data across the internet. BGP plays a crucial role in this, as it helps in finding the best paths for data to travel, ensuring efficiency and reliability in connectivity.

Choosing the Right IP Transit Provider

Selecting the right IP transit provider is crucial for ensuring your business’s connectivity needs are met effectively. Here are key factors to consider:

  • Network Reach and Capacity: Evaluate whether the provider has a robust, global network that can offer the reach and bandwidth your business requires.
  • Peering Relationships: Providers with extensive peering agreements can ensure more direct routes and potentially better performance.
  • SLAs and Reliability: Look for strong Service Level Agreements that offer guarantees on uptime, bandwidth, and support responsiveness.
  • ASN and BGP Expertise: Ensure the provider has a solid track record of managing Autonomous Systems and utilising BGP effectively for optimal routing.
  • Pricing Structure: Understand the pricing model, including how traffic is measured and billed, and ensure it aligns with your business’s traffic patterns and budget.

What is Tier 1 transit?

Tier 1 IP Transit refers to the highest level of service in the Internet Provider hierarchy, offered by ISPs that have the ability to reach the entire internet region without purchasing IP transit from any other networks. These providers are at the top of the global internet infrastructure because they participate in extensive peering agreements with other Tier 1 providers, allowing them to exchange traffic directly without cost.

Tier 1 providers are the backbone of the internet, ensuring seamless, global connectivity through their comprehensive networks, and enabling lower-tier ISPs and large networks to access the broader internet through their services.

How is IP transit priced?

IP Transit pricing is structured around several key factors that reflect the cost of accessing and transmitting data across the provider’s network to the broader internet. The pricing models can vary between providers, but they generally revolve around the following elements:

  1. Volume of Data (Bandwidth Usage): One of the primary factors in IP Transit pricing is the volume of data transmitted. This is often measured in megabits per second (Mbps) or gigabits per second (Gbps). Providers may charge based on the peak usage (the highest bandwidth usage observed during a billing period) or the 95th percentile method, which disregards the top 5% of traffic spikes, offering a balance between fair billing and accommodation of occasional traffic bursts.
  2. Commitment Levels: Providers often offer tiered pricing based on the level of bandwidth commitment. Higher commitments typically result in lower per-unit costs. Businesses can choose a commitment level based on their expected traffic needs, balancing cost with the need for bandwidth.
  3. Quality of Service: The quality and reliability of connectivity can also impact pricing. Services that come with higher Service Level Agreements (SLAs) for uptime, latency, and packet loss may command a premium price. These guarantees are crucial for businesses that rely heavily on their online presence and operations.
  4. Geographical Reach: The cost of IP Transit can also vary depending on the geographical reach required. Accessing certain regions, especially those with less developed internet infrastructure or fewer connectivity options, may incur higher costs due to the additional expenses associated with providing service in those areas.
  5. Additional Services: Some providers may include or offer additional services such as DDoS protection, direct cloud connectivity, or enhanced routing options for an additional fee. These services can add value but will also impact the overall cost.
  6. Market Conditions: The IP Transit market is competitive, and prices can fluctuate based on supply and demand, the competitive landscape in a particular region, and the availability of infrastructure and peering agreements.

IP transit vs peering

IP transit is a paid service where a network pays for access to the entire internet through another network’s infrastructure, whereas peering is a mutual agreement between networks to exchange traffic directly without cost to reduce latency and bandwidth charges.

Here are the top 3 differences between IP Transit and Peering:

Feature IP Transit Peering
Access Access to the entire internet. Direct exchange between specific networks.
Cost Model Paid service based on bandwidth or capacity. Generally no charge, based on mutual agreement.
Relationship Customer-provider relationship. Partnership between networks of similar size or traffic volume.

IP transit vs DIA

IP transit provides networks with access to the entire internet through a provider’s infrastructure, typically aimed at ISPs and large enterprises, while Dedicated Internet Access (DIA) offers businesses a private, direct connection to the internet with guaranteed bandwidth and reliability.

Here are the top 3 differences between IP Transit and Dedicated Internet Access (DIA):

Feature IP Transit Dedicated Internet Access (DIA)
Purpose Provides access to the entire internet, enabling a network to send and receive data across the globe. Offers a direct, non-shared connection to the internet for a single end-user or business.
Target Audience Ideal for ISPs, large enterprises, and content providers needing to access or distribute data globally. Suited for businesses of any size requiring reliable, high-speed internet access with guaranteed bandwidth.
Bandwidth and Pricing Pricing based on the volume of data transmitted, with flexibility to scale up or down based on demand. Typically comes with fixed bandwidth at a fixed monthly rate, guaranteeing specific speeds without fluctuation.


What's your goal today?

1. Are you on the Colt IQ network?

Our network connects over 31,000 buildings worldwide powering companies such as Hitachi, Atos, Forbes, Arthur D Little, Brussels Airlines and thousands of others. Find out if you're Colt connected now.

2. Learn about digital infrastructure

We've written thousands of guides and white papers, regularly publish content on our blog and host regular events on everything from enterprise network connectivity, to cloud, digital transformation and the hybrid workforce.

3. Join our team

To learn more about joining our team of over 5000 people around the world, and to browse our current open roles visit https://careers.colt.net/.