le, one distinct point in each country in which all companies pro- viding Internet connectivity meets and interconnect their networks. Who connects to whom is public information? Public peering is most suitable for small, international ISPs. Private Peering: This is the direct interconnection between only two networks, across a Layer 1 or 2 medium that offers dedicated capacity that is not shared by any other parties. Private peering is a peering agreement based on common terms which are suitable for both parties. In private peering, only one operator is connected on each connection - which means that the carrier has a 100%control of the connection. All major Tier-1 ISPs use private peering. 7.5.2.3 IP Transit VS. Peering IP Transit has more reach and is used much more than peering. The more peers, the more related equipment required, and the higher the capital expenditure. In general, peering agreements pay off when the number of peers is few and the network coverage is low. In the end, no ISP will have enough traffic to justify too many peers covering all regions. Here is where IP Transit comes in as the most cost-efficient solution. However, it should be emphasized that IP Transit is not the right choice for everyone. If the vast majority of an ISP's customers all want to reach the same destination, the ISP is probably better off by putting together a solution based on capacity and peering. Transport Network Evolution The transport network has been evolving since the inception of cellular telephony in the 1970s. Microwave and copper (leased lines) were traditionally used to cater for the demands of GSM and analog systems TDM traffic. The advent of GPRS and other low-end data networks brought PDH and SDH in the backhaul and fiber in the backbone transport networks in 1990s. The earlier versions of 3G (UMTS Rel-99/Rel-4, CDMA2000) used SONET/DWDM, ATM and IP in Layers 1, 2, and 3 respectively. The migration towards HSPA and EV-DO packet switched networks highlighted the use of MPLS as a Layer 2.5 technology as s