Tier 1 Carrier

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What Does Tier 1 Carrier Mean?

A tier-1 carrier is an Internet Service Provider (ISP) that can serve its coverage area entirely through settlement-free collaboration with other carriers, rather than having to pay tolls to other companies for using parts of a third party’s IP network. Tier-1 carriers tend to have large coverage areas and large footprints, with a lot of infrastructure and massive financial resources.

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Organizations that operate tier-1 networks include AT&T, Verizon, Sprint and T-Mobile.

Techopedia Explains Tier 1 Carrier

Peering is key to an organization’s tier-1 carrier designation. Many tier-1 carriers have peering agreements that involve network sharing and data transit collaboration.

A tier-1 carrier charges other carriers for access, and tier-2 or tier-3 carriers must pay for data transit. For example, a carrier with network capability over most of its area may pay another carrier for "last mile" service, where the data is transmitted from one node to the endpoint.

Smaller carriers generally combine peering and paid data transit agreements.

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Margaret Rouse
Senior Editor
Margaret Rouse
Senior Editor

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.