IP Transit
Internet Transit
The wholesale service of carrying a network's traffic to and from the rest of the internet. If peering is a direct shortcut between two networks, transit is the paid on-ramp that connects you to everywhere.
IP transit is a commercial service: a larger provider agrees to carry your network's traffic to and from the entire internet. A smaller ISP cannot physically connect to every other network on Earth, so it buys transit from a carrier that can — effectively renting global reachability. The customer announces its routes to the transit provider, and the provider delivers that traffic everywhere and brings the responses back.
How transit is sold
Transit is billed by bandwidth, usually in dollars per Mbps per month, and almost always measured using the 95th-percentile method: the provider samples your usage in short intervals across the month, discards the top 5% of peaks, and bills on the highest remaining value. This lets a network burst occasionally without paying for its rare maximum. Prices have fallen dramatically over the decades as the internet has scaled, but transit remains a real, ongoing cost that shapes how ISPs build their networks.
Transit vs peering
| IP Transit | Peering | |
|---|---|---|
| Reaches | The whole internet | Only the peer's network |
| Cost | Paid, by bandwidth | Often settlement-free |
| Role | Guaranteed global on-ramp | Optimises specific high-volume flows |
The two are complementary. A network buys transit so it can reach anywhere, then arranges peering to move its biggest, most predictable traffic onto cheaper direct paths — reducing the volume it has to push through (and pay for on) transit.
The tier hierarchy
Transit and peering define the internet's informal tiers, all coordinated via BGP and identified by ASN:
- Tier 1: reaches the whole internet purely through settlement-free peering — buys no transit at all. These are the global backbone carriers.
- Tier 2: peers widely but still buys some transit to fill gaps in reachability. Most large regional ISPs sit here.
- Tier 3: relies entirely on purchased transit to reach the internet.
Why it matters to your connection
Your traffic's path depends on the transit and peering choices your ISP has made. A well-connected provider with diverse transit and rich peering routes your packets efficiently and has spare capacity at peak times. A provider skimping on transit or peering can see congestion build during busy hours, slowing everyone on the network. Transit and peering are invisible from your living room, but together they form the economic plumbing that determines whether your connection performs as advertised.