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Interconnection Agreement

Definition - 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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