What is the Internet? How does the Internet work and transmit data? In short, the internet is a large network of networks that all connect with each other. In order for Internet users to get the content they request they need to connect to the Internet through an Internet service provider (ISP). Since there are thousands of networks spread across the world, ISPs need to find ways to send traffic everywhere. To facilitate this process, ISPs connect with one another to carry each other’s traffic.
In the most basic case, an ISP purchases transit, where it simply pays one or more other ISPs for connections to the global Internet.
Sometimes, when two ISPs connecting with each other mutually agree that the value they bring to each other is about the same or they are each sending the other about the same amount of data, they may decide to connect their networks directly to exchange traffic between each other’s customers without either party paying each other. This is called peering. Because peering is a barter transaction where the payments would largely offset each other, it is done without the exchange of money. In cases where the parties are not exchanging equal volumes of traffic or the contributions made to enable the exchange of traffic between the connecting parties is not equal, there is no basis for a barter transaction and the party contributing less pays something to help balance things out.
Content delivery networks (CDNs) are similar to local distribution centers—storing many videos, movies and TV shows—that can deliver that high bandwidth content more efficiently by placing copies of the content on servers located much closer to the final consumer.
For more information on how data moves across the Internet, watch our video and check out some of the resources below.