Interconnect agreement
Encyclopedia
An interconnect agreement is a business contract
between telecommunications organizations for the purpose of interconnecting their networks and exchanging telecommunications traffic. Interconnect agreements are found both in the public switched telephone network
and the Internet
.
In the public switched telephone network, an interconnect agreement invariably involves settlement fees based on call source and destination, connection times and duration, although these fees often cancel out between operators.
On the Internet, where the concept of a "call" is generally hard to define, settlement-free peering
and Internet transit
are common forms of interconnection. A contract for interconnection within the Internet is usually called a peering agreement.
Interconnect agreements are typically complex contractual agreements, involving payment schemes and schedules, coordination of routing policies
, acceptable use policies
, traffic balancing requirements, technical standards, coordination of network operations, dispute resolution, etc. Legal and regulatory requirements are often an issue: for example, network operators may be forced by law to interconnect with their competitors. In the United States, the Telecommunications Act of 1996
mandated methods of interconnection and the compensation models for doing so.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
between telecommunications organizations for the purpose of interconnecting their networks and exchanging telecommunications traffic. Interconnect agreements are found both in the public switched telephone network
Public switched telephone network
The public switched telephone network is the network of the world's public circuit-switched telephone networks. It consists of telephone lines, fiber optic cables, microwave transmission links, cellular networks, communications satellites, and undersea telephone cables, all inter-connected by...
and the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
.
In the public switched telephone network, an interconnect agreement invariably involves settlement fees based on call source and destination, connection times and duration, although these fees often cancel out between operators.
On the Internet, where the concept of a "call" is generally hard to define, settlement-free peering
Peering
In computer networking, peering is a voluntary interconnection of administratively separate Internet networks for the purpose of exchanging traffic between the customers of each network. The pure definition of peering is settlement-free or "sender keeps all," meaning that neither party pays the...
and Internet transit
Internet transit
Internet transit is the service of allowing network traffic to cross or "transit" a computer network, usually used to connect a smaller Internet service provider to the larger Internet...
are common forms of interconnection. A contract for interconnection within the Internet is usually called a peering agreement.
Interconnect agreements are typically complex contractual agreements, involving payment schemes and schedules, coordination of routing policies
Policy-based routing
In computer networking, policy-based routing is a technique used to make routing decisions based on policies set by the network administrator....
, acceptable use policies
Acceptable use policy
An acceptable use policy is a set of rules applied by the owner/manager of a network, website or large computer system that restrict the ways in which the network site or system may be used...
, traffic balancing requirements, technical standards, coordination of network operations, dispute resolution, etc. Legal and regulatory requirements are often an issue: for example, network operators may be forced by law to interconnect with their competitors. In the United States, the Telecommunications Act of 1996
Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...
mandated methods of interconnection and the compensation models for doing so.