Interconnection Agreement

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What Does Interconnection Agreement Mean?

An interconnection agreement is a business contract between telecommunication organizations for interconnecting their networks and exchanging telecommunication traffic. These agreements are present in both public switched telephone networks and the Internet.


Techopedia Explains Interconnection Agreement

In public switched telephone networks, the interconnection agreement deals with settlement fees based on the call source and destination, the time-of-day, and the call duration.The common forms of interconnection on the Internet are settlement-free peering and Internet transits. Contracts for interconnection on the Internet is referred to as a peering agreement. These are complex contractual agreements, which often involve negotiation around the following:

  • Payment schemes and schedules
  • Coordination of routing policies
  • Acceptable use policy
  • Technical standards
  • Traffic balancing requirements
  • Coordination of network operation
  • Dispute resolution

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Margaret Rouse
Technology Expert
Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.