Definition - What does Two-Tiered Internet mean?
Two-tiered Internet refers to a proposed Internet structure that would allow entities that provide connections and interconnections to the World Wide Web such as telecommunications companies and Internet service providers (ISPs) to divide the traffic running through their lines into different tiers. In this case, two tiers: a preferred or premium tier boasting performance to those that can afford it and a lower tier for what effectively translates to "everybody else."
Techopedia explains Two-Tiered Internet
The two-tiered Internet is just another "business" proposal that telecommunications corporations, ISPs and other network owners can get behind in because it furthers their financial goals. Although the talk is having two different infrastructure tiers as well, the more logical and economical solution is to retain the same infrastructure, upgrade it to be faster but deliberately throttle the bandwidth on non-preferred traffic. These companies could then charge big websites for the privilege of getting preferred service.
Two-tiered Internet is part of the net neutrality issue, which is why it has not yet been implemented. Net neutrality simply means providing the same infrastructure and performance to all kinds of Web traffic without bias. That is the current status quo: websites do not pay ISPs so that users can visit them; instead, it is the users who pay the ISP to get access to the Internet and visit those sites. With two-tiered Internet, those websites will also have to pay the ISP, potentially every ISP in the world, so that they can deliver their content to the already paying users.
The issue is readily evident here as it is detrimental to both users and website owners who will see greatly reduced traffic simply because users cannot log on quick enough and may even leave due to frustration if the website does not pay the ISP. Obviously, this would result in greatly varied performance of the same website with different ISPs, depending on whether the latter were paid or not. Unlike in the current structure, where the bottleneck is just the user's subscription tier, in two-tiered Internet, even if the user has a 100-Mbps Internet subscription, if a website like YouTube has not paid the ISP, then that user will experience a greatly degraded performance at the said website.