A Beginner’s Guide To IP Transit: Its Role, Services, Tiers, & More

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Ip tranist

Have you ever wondered how to access any website in your browser without any issues?

Websites are hosted on servers distributed across the world. Yet, you can easily access any website with little to no delays.

This article shall reveal how IP transit, an interesting internet feature, ensures a smooth browsing experience.

But before exploring IP transit, let’s see how the Internet works in general and the role of the IP address in your browsing experience.

Table of Contents

  1. How Does the Internet Operate
  2. The Role of IP Addresses
  3. What is the IP Transit Service?
  4. Understanding the Border Gateway Protocol (BGP)
  5. Tiers of IP Transit Providers
  6. How Does IP Transit Work?
  7. IP Transit Vs. IX Transit Vs. DIA, Which One Should You Choose?
  8. Threats to the IP Transit Services
  9. Conclusion
  10. FAQs

How Does the Internet Operate

The global Internet is a collection of interconnected networks connecting servers, devices, and users worldwide. Similarly, a network comprises a collection of devices connected to communicate.

Here’s how information flows across these networks.

A piece of information is divided into small bits, known as packets. These packets are transmitted over a single or several interconnected network(s) before they’re reassembled at the destination.

So, when interconnected networks agree on exchanging traffic, data packets travel from points A to B on the Internet. The most popular form of these arrangements is known as IP Transit.

The Role of IP Addresses

An Internet Protocol (IP) address is the numerical identifier assigned to every network device (network or host devices). It is one of the most significant communication protocols governing how information moves over the Internet.

IP addresses have two popular variants – the 32-bit IPv4 and the 128-bit IPv6. Out of these, IPv4 has been around for almost a decade, and IPv6 is in the process of being quickly rolled out as the number of internet-enabled devices increases exponentially.

These IP addresses (v4 and v6) are organized in blocks and assigned to a regional Internet registry (RIR). The RIRs distribute the assigned blocks to local entities, including ISPs, enterprises, and government agencies.

The IP addresses offered by an RIR come in two flavors:

Independent Provider (PI)

A PI block of IP addresses is allocated directly to the user through the RIR. The user negotiates with their ISP to transfer the block to the Internet. The great thing about PI blocks is that customers can retain them after moving from one ISP to another.

Provider Aggregated (PA)

A PA IP block is usually a part of a larger block of IP addresses. The ISP assigns these PA blocks to their customers. Note that the ownership of a PA block remains with the ISP. As a result, when a user switches ISP, the PA block needs to be changed.

What is the IP Transit Service?

Data packets must pass through several third-party networks to the destination.

IP transit is a service that an Internet Service Provider uses to allow traffic to traverse their network. This service uses the Border Gateway Protocol (BGP) to provide global access to the Internet. And, like other service providers, ISPs might need to pay IP Transit service providers to access their extensive BGP Internet routing table.

IP Transit is available to users with an autonomous System and can establish routing using the Border Gateway Protocol. Border Gateway Protocol.

Introducing Autonomous System (AS) & Autonomous System Number (ASN)

An Autonomous System (AS) represents an ISP or similarly significant component of the global internet connectivity consisting of interconnected networks. When your computer or other device connects to other networks, it must first connect to an autonomous system (AS). Autonomous systems are bigger networks that come together to form the Internet. The Internet, in other terms, is a network of bigger autonomous systems. Each AS is linked to a variety of devices and computers.

Each AS has a unique Autonomous System Number (ASN) to identify itself and interact with other AS.

For instance, IPTP Networks is an AS component of the ASN 41095. This network connects its customers as well as other ASes across the globe.

It’s important to understand that only the entities that operate their own AS or otherwise have an ASN assigned to them can use the IP Transit service.

Understanding the Border Gateway Protocol (BGP)

As you now know, the IP Transit service uses the Border Gateway Protocol (BGP). AS utilizes BGP to communicate with each other and permit cross-network traffic transit through reachability information.

BGP uses reachability information, including two lists of IP addresses – one of AS sending the AS and one that receives the AS. BGP uses the reachability information to decide on the best route to send a data packet. The process also determines the path data packets follow to reach the destination.

Thanks to ASNs and the BGP, networks can exchange huge volumes of internet traffic without issues.


A BGP community provides the approach for tagging routes. Communities in BGP can be added or withdrawn. A BGP community is an optional transitive BGP property that can traverse from one AS to another if the AS’s community policy permits it.

A routing policy can be defined to treat all routes that meet particular BGP communities the same way.

BGP has four communities:

Internet Community: Distribute the prefix corresponding to this community to all BGP neighbors.
No-Advertise Community: Do not advertise this prefix to any BGP neighbors.
No-Export Community: Do not announce this prefix to any External BGP neighbors.

Local-AS Community: This prefix should not be advertised outside the sub-Autonomous System.
Each IP Transit ISP provides a set of communities that allow traffic manipulation inside the ISP or regarding the ISP’s peers/upstreams. These communities often enable you to specify a local route preference or execute AS-PATH prepending to make a customer route look less favored.

Tiers of IP Transit Providers

IP Transit Providers

Internet transit companies (ISPs) are classified into three service levels depending on their capabilities.

Tier 1

Tier 1 ISPs serve as the Internet’s backbone. This is because each serves as a worldwide conduit for every Internet network. There are just a few of these network providers around the globe, yet they have an extensive worldwide reach. They can connect directly for free but charge a fee for lower-tier providers that wish to utilize their network. Tier 2 and Tier 3 ISPs can connect to Tier 1 networks by paying a ‘transit fee.’

Tier 2

Tier 2 ISPs have extensive networks with either national or regional coverage. Just a handful of Tier 2 ISPs can serve customers across multiple continents. These providers share their data with other Tier 2 providers to reduce IP transport costs. However, they still need to purchase IP transport from ISPs in Tier 1 to connect to the different parts of the Internet.

Tier 3

Tier 3 ISPs are regional service providers with networks that span some countries or subregions. These ISPs purchase only Internet traffic. To avoid the expensive costs of Tier 1 IP transit, they often buy the IP of Tier 2 service providers. Tier 3 ISPs generally do not have transit clients and are usually focused on local consumer and business markets.

The ISP hierarchy categorizes traffic with higher Tiers as Upstream and those with lower Tiers as Downstream. For example, when traffic is moving from Tier 3 to Tier 2, it’s moving upwards. In this scenario, the ISP with a lower Tier (Tier 3) is Downstream and buys IP Transit service from a Tier 2 ISP (that acts as the Upstream service provider. ISPs with a similar Tier, like Tier 1 and Tier 1 ISPs, are called peers.

How Does IP Transit Work?

IP Transit connects a customer’s network to the Internet and offers a fast route for traffic to reach its destination. The user is charged a fee for transit for connecting to a specific location called a POP (Point of Presence), which the provider provides.

The provider then ensures that the user can connect to any server on the Internet and all Internet servers.

IP Transit is priced per megabit per month. Usually, the contract comes with an SLA that defines the service quality and reimbursement terms for cases where the customer cannot connect to the Internet for a pre-agreed duration.

Based on the network’s size and the service tier, the company will have to purchase one or more networks to move the customer’s data to the desired destination through their upstream transportation link.

Simply put, if you wish to send or receive data over the Internet, you must go via third-party networks. This transit is handled by IP transit services, which network operators or internet service providers provide. In other words, ISP networks allow traffic to flow through and reach its destination.

However, IP transit services are not included with your internet connection. Instead, you must pay for these services, normally paid in monthly installments or on a use basis.

Even though it is a paid service, IP transit is required if you operate a business. The good news is that you may select the best transportation service provider.

IP Transit Vs. IX Transit Vs. DIA, Which One Should You Choose?

In addition to IP Transit, you can opt for two other connectivity options: IX Transit and DIA.

Let’s start with the definitions of these terms.

IX Transit

IX Transit is a peering service for public use accessible via an Internet Exchange Point (IXP).

An IXP is the point of connection through which an ISP’s network can join to exchange Internet traffic. It is also referred to as a portion of IP Transit that allows traffic to connect with other peers and downstream ISP’s networks for the best latency.


DIA refers to Direct Internet Access and works similarly to IP Transit.

DIA is by far the most commonly used internet service available to those who do not have an ASN. Compared to IP Transit, DIA is an affordable alternative. However, DIA users might face some downtime.

Budget, the number of peers, and your specific requirements for latency are some aspects to consider when choosing IP Transit, IX Transit, or DIA.

DIA would be the best option if you still need an ASN and are only looking for an affordable and simple internet service suitable for general use.

IX Transit is a good fit for businesses that work with latency-sensitive apps and want to be in control of their network routing and traffic optimization, all on a tight budget.

Regardless of how you connect to the internet, IP Transit is necessary for businesses that need global connectivity.

Threats to the IP Transit Services

When businesses purchase IP transit services, they also get additional services that help them set up better protection against the attacks on the IP Transit service.

Here are two common threats on the IP Transit services and how the bundled services offer protection.

Distributed Denial of Service (DDoS)

A Denial of Service (DoS) attack attempts to prohibit legitimate users from utilizing all or a specific service on a server. A Distributed Denial of Service (DDoS) attack occurs when a DoS attack is launched from numerous sources. Almost always, the sources of these attacks are unaware that they are carrying out such an attack. That’s because they are infected with trojan horses and viruses, which allow attackers to gain control and include the devices in the attack net.

Most IP Transit Network providers include DDoS protection, which warns customers of the attack so that they may take preventive actions. The DDoS protection is available for IPv4 and IPv6 as an Application Layer (OSI model Layer 7) service.

Public Key Infrastructure as a Resource

The Internet or IP Transit traffic can also get compromised because of misconfigurations or deliberate attacks.

BGP flapping is an example of this situation where a BGP system sends excessive update messages to broadcast network reachability information. This barrage overwhelms the BGP neighbors. Routing equipment manufacturers and vendors support “BGP damping” to delay traffic to regain stability.

A BGP leak is another example where the device broadcasts blocks of wrong IP addresses across networks. This might occur due to an unintended misconfiguration. However, hackers often use a similar strategy known as BGP hijacking or man-in-the-middle attacks.

Network admins use Resource Public Key Infrastructure (RPKI) to validate BGP routing information in this situation. This prevents the damage caused by misconfigured or malicious BGP routing information.


IP Transit offers Internet connectivity by allowing networks to connect to global networks through a high-bandwidth network.

It connects networks to an upstream provider through a data center or Point of Presence. IP Transit is used by companies, organizations, and ISPs that require high-speed, reliable connectivity to the Internet.

IP transit prices are by the volume of data transferred through the connection and other elements like the reliability and quality of the upstream provider and the amount of support they provide.

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Q: Who is the typical user of IP Transit?

The best fit for IP Transit is businesses that require fast, reliable internet connection. Typical use cases include transferring large quantities of data, hosting and other online services, or connecting to different networks or services.

Q: What are the benefits of IP Transit?

The advantages of IP transit are access to an extensive global range of services, fast and reliable Internet connectivity, and the capability to connect to different networks and services. IP transit also has redundant and failover features to ensure that connectivity is not lost when one provider or connection fails.

Q: How much is IP Transit priced?

The cost of IP transit is often determined by the volume of data transferred through the connection and expressed in Mbps (megabits per second) or Gbps. (gigabits per second). The price may also vary according to the reliability and quality of the upstream service provider, the level of support provided, and similar variables.

When considering IP Transit, IX Transit, or DIA for your business, it is important to evaluate your requirements and budget before deciding. As each service is designed to meet different needs, there will be advantages and disadvantages associated with each option.

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