Internet transit

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Internet transit consists of two bundled services: the advertisement by an Internet service provider (ISP) of routes to a customer's Internet Protocol addresses to the other ISPs who constitute the rest of the Internet, thereby soliciting inbound traffic from them on behalf of the customer; and the advertisement of a default route, or a full set of routes to all of the destinations on the Internet, to the ISP's customer, thereby soliciting outbound traffic from them.

In the 1970s and early 1980s-era Internet, the assumption was made that all networks would provide transit for one another, since all were ultimately publicly funded by the United States Government's National Science Foundation. In the modern private-sector Internet, two forms of interconnection exist between Internet networks: transit, and peering. Transit is distinct from peering, in which only traffic between the two ISPs' downstream customers is exchanged over the peering connection, and neither ISP can see upstream through the other's transit providers to the rest of the Internet.

The transit service is typically priced per megabit per second per month, and customers are often required to commit to a minimum volume of bandwidth, and usually to a minimum term of service as well. Some transit agreements provide "service level agreements" which purport to offer money-back guarantees of performance between the customer's Internet connection and specific points on the Internet, typically major Internet exchange points within a continental geography such as North America. These service level agreements still provide only best-effort delivery since they do not guarantee service the other half of the way, from the Internet Exchange Point to the final destination.