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A Tier 1 Network is an IP network (typically but not necessarily an Internet Service Provider) which connects to the entire Internet solely via Settlement Free Interconnection, also known as settlement free peering.

Definition

Although there is no authority which has defined the "tiers" of Internet networks, the most common definition is:

• A network that can reach every other network on the Internet without purchasing IP transit or paying settlements.^[1]

By this definition, a Tier 1 Network is a transit-free network. But not all transit-free networks are Tier 1 Networks. It is possible to become transit free by paying for peering or agreeing to settlements.

It is trivial^{[citation needed]} to objectively prove (or disprove) a network is transit free. The fourteen (14) networks listed below, and only those fourteen, are transit free (as of July 2008).^{[original research?]} The most widely quoted source is Renesys Corporation, but the base information to prove the claim is publicly accessible from many locations, such as the RIPE RIS database, the Oregon Route Views servers, the Packet Clearing House, and others.

It is impossible for an outside authority to confirm that a network is not paying settlements of any type because such business agreements are frequently not public information, or even covered under a Non-Disclosure Agreement. The information presented here is the best collective knowledge of the Internet peering community. There is little disagreement amongst the community itself, even though there is no quotable source for the information. (For clarity, here we will define the "peering community" as the set of peering coordinators for networks which are present at Internet Exchanges on at least two continents.)

It is commonly believed^{[by whom?]} that observing this definition strictly would result in every network being disqualified. For instance, many large telephone companies who are also Tier 1 Networks buy, sell, or swap fiber amongst themselves. Even if it were possible to list every transaction, it is not possible to know if some of those transactions were required for or in payment of a peering connection.

As a result, the term Tier 1 Network is used in the industry to mean a network with no overt settlements. An overt settlement would be a monetary charge for the amount, direction, or type of traffic sent between networks.

Common definitions of Tier 2 and Tier 3 networks:

• Tier 2 - A network that peers with some networks, but still purchases IP transit or pays settlements to reach at least some portion of the Internet.
• Tier 3 - A network that solely purchases transit from other networks to reach the Internet.

source : wiki