One could say that the phrases "Tier I" and "backbone provider" are a bit redundant; others might say that they comfortably go together (like "ice cold Coke"). the functional contrast should be between a Tier I provider (e.g. AT&T, MCI, Sprint, Savvis/C&W, Global Crossing, Qwest, Level 3) and companies that are not Tier I providers -- who themselves have to buy bandwidth from Tier I providers.

Best example would be a local Internet provider offering T1 or DS3 service in a regional area: they might have their own facilities interconnecting different serving offices in a region, but they would have to send the traffic to a Tier I provider if the traffic goes outside their region. The Tier II provider makes money by buying a fixed amount of bandwidth, and selling it to many subscribers. The company must decide on what level of contention their customers must be exposed to. If you take a look at the W(wireless) ISP forum in BBR Reports you will see several threads from time to time discussing something like "how many customers will fit on a T1." Different providers will have different philosophies about how much to oversubscribe their network. What is true in the WISP world is also true in the cable internet world, and is also in the Tier II world. Think of it this way: if a local Tier II provider like "X-Com" (made up name) sells a T1 service to a new customer, will they add incrementally to their wholesale bandwidth purchase? No. But if Sprint sells a T1, their customer will get a dedicated port onto Sprint's backbone network at full speed with no contention.

Generally, there will be a price advantage of using a Tier II provider compared to a Tier I provider, as Tier II providers undercut the Tier I pricing and can afford to do so as they are oversubscribing their network facilities.

Tier II providers can be excellent source of inexpensive bandwidth if your network needs can absorb occasional delays or added latency (I'm not talking outages) -- if it's not mission critical or real time stuff, or if you're not yourself reselling the bandwidth.

Others might have other thoughts....

Bottom line is don't shop just on price. There's more to making a good business decision than dollars and cents. You need to make sure you get exactly what you need no matter what the cost.

Michael is the owner of FreedomFire Communications....including DS3-Bandwidth.com and Business-VoIP-Solution.com. Michael also authors Broadband Nation where you're always welcome to drop in and catch up on the latest BroadBand news, tips, insights, and ramblings for the masses.

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