A tier 1 network is an (IP) network that participates in the Internet solely via settlement-free interconnection, also known as settlement-free peering.
There is no authority that defines tiers of networks participating in the Internet. However, the most common and well-accepted definition of a tier 1 network is a network that can reach every other network on the Internet without purchasing IP transit or paying for peering. By this definition, a tier 1 network must be a transit-free network (purchases no transit) that peers for free with every other tier 1 network. Not all transit-free networks are tier 1 networks, as it is possible to become transit-free by paying for peering.
The most widely quoted source for identifying tier 1 networks is published by Renesys Corporation, but the base information to prove the claim is publicly accessible from many locations, such as the RIPE RIS database, the Oregon Route Views servers, Packet Clearing House, and others.
It is difficult to determine whether a network is paying for peering or transit as these business agreements are rarely public information, or are covered under a non-disclosure agreement. The Internet peering community is roughly the set of peering coordinators present at the Internet exchange points on more than one continent. The subset representing tier 1 networks is collectively understood in a loose sense, but not published as such.
Common definitions of tier 2 and tier 3 networks:
The original Internet backbone was the ARPANET when it provided the routing between most participating networks. It was replaced in 1989 with the NSFNet backbone. The Internet could be defined as the collection of all networks connected and able to interchange datagrams with this backbone.
When the Internet was opened to the commercial markets, multiple for-profit Internet backbone and access providers emerged. The network routing architecture then became decentralized and attained a need for exterior routing protocols, in particular the emerged. New tier 1 ISPs and their peering agreements supplanted the government-sponsored NSFNet, a program that was officially terminated on April 30, 1995.