Types of routers

Routers may provide connectivity inside enterprises, between enterprises and the Internet, and inside Internet Service Providers (ISP). The largest routers interconnect ISPs, are used inside ISPs, or may be used in very large enterprise networks. An example of an enterprise router would be the Cisco 7600 . The smallest routers provide connectivity for small and home offices

How ISPs connect to the Internet

Just as their customers pay them for Internet access, ISPs themselves pay upstream ISPs for Internet access. In the simplest case, a single connection is established to an upstream ISP using one of the technologies , and the ISP uses this connection to send or receive any data to or from parts of the Internet beyond its own network; in turn, the upstream ISP uses its own upstream connection, or connections to its other customers (usually other ISPs) to allow the data to travel from source to destination.
In reality, the situation is often more complicated. For example, ISPs with more than one point of presence (PoP) may have separate connections to an upstream ISP at multiple PoPs, or they may be customers of multiple upstream ISPs and have connections to each one at one or more of their PoPs. ISPs may engage in peering, where multiple ISPs interconnect with one another at a peering point or Internet exchange point (IX), allowing the routing of data between their networks, without charging one another for that data - data that would otherwise have passed through their upstream ISPs, incurring charges from the upstream ISP. ISPs that require no upstream and have only customers and/or peers are called Tier 1 ISPs, indicating their status as ISPs at the top of the Internet hierarchy. Routers, switches, Internet routing protocols, and the expertise of network administrators all have a role to play in ensuring that data follows the best available route and that ISPs can "see" one another on the Internet.

Peering

Peering is 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 other for the exchanged traffic, instead, each derives revenue from its own customers. Marketing and commercial pressures have led to the word peering routinely being used when there is some settlement involved, even though that is not the accurate technical use of the word. The phrase "settlement-free peering" is sometimes used to reflect this reality and unambiguously describe the pure cost-free peering situation.
Peering requires physical interconnection of the networks, an exchange of routing information through the Border Gateway Protocol (BGP) routing protocol and is often accompanied by peering agreements of varying formality, from "handshake" to thick contracts.

Virtual ISP

A Virtual ISP (vISP) purchases services from another ISP (sometimes called a wholesale ISP or similar within this context) that allow the vISP's customers to access the Internet via one or more point of presence (PoPs) that are owned and operated by the wholesale ISP. There are various models for the delivery of this type of service; for example, the wholesale ISP could provide network access to end users via its dial-up modem PoPs or DSLAMs installed in telephone exchanges, and route, switch, and/or tunnel the end user traffic to the vISP's network, whereupon they may route the traffic toward its destination. In another model, the vISP does not route any end user traffic, and needs only provide AAA (Authentication, Authorization and Accounting) functions, as well as any "value-add" services like email or web hosting. Any given ISP may use their own PoPs to deliver one service, and use a vISP model to deliver another service, or, use a combination to deliver a service in different areas. The service provided by a wholesale ISP in a vISP model is distinct from that of an upstream ISP, even though in some cases, they may both be one and the same company. The former provides connectivity from the end user's premises to the Internet or to the end user's ISP, the latter provides connectivity from the end user's ISP to all or parts of the rest of the Internet.
A vISP can also refer to a completely automated white label service offered to anyone at no cost or for a minimal set-up fee. The actual ISP providing the service generates revenue from the calls and may also share a percentage of that revenue with the owner of the vISP. All technical aspects are dealt with leaving the owner of vISP with the task of promoting the service. This sort of service is however declining due to the popularity of unmetered internet access also known as flatrate.

IP address

An IP address (Internet Protocol address) is a unique address that certain electronic devices use in order to identify and communicate with each other on a computer network utilizing the Internet Protocol standard (IP)—in simpler terms, a computer address. Any participating network device—including routers, switches, computers, infrastructure servers (e.g., NTP, DNS, DHCP, SNMP, etc.), printers, Internet fax machines, and some telephones—can have its own address that is unique within the scope of the specific network. Some IP addresses are intended to be unique within the scope of the global Internet, while others need to be unique only within the scope of an enterprise.
The IP address acts as a locator for one IP device to find another and interact with it. It is not intended, however, to act as an identifier that always uniquely identifies a particular device. In current practice, an IP address is not always a unique identifier, due to technologies such as dynamic assignment and network address translation.
IP addresses are managed and created by the Internet Assigned Numbers Authority (IANA). The IANA generally allocates super-blocks to Regional Internet Registries, who in turn allocate smaller blocks to Internet service providers and enterprises.

IP address subnetting

Both IPv4 and IPv6 addresses utilize subnetting, or dividing the IP address into two parts: the network address and the host address. By using a subnet mask, the computer can determine where to split the IP address.

Static and dynamic IP addresses

When a computer uses the same IP address every time it connects to the network, it is known as a Static IP address. In contrast, in situations when the computer's IP address changes frequently (such as when a user logs on to a network through dialup or through shared residential cable) it is called a Dynamic IP address.

Method of assignment

Static IP addresses are manually assigned to a computer by an administrator. The exact procedure varies according to platform. This contrasts with dynamic IP addresses, which is assigned either randomly (by the computer itself, as in Zeroconf), or arbitrarily assigned by a server using Dynamic Host Configuration Protocol (DHCP). Even though IP addresses assigned using DHCP may stay the same for long periods of time, they can generally change. In some cases, a network administrator may implement dynamically assigned static IP addresses. In this case, a DHCP server is used, but it is specifically configured to always assign the same IP address to a particular computer, and never to assign that IP address to another computer. This allows static IP addresses to be configured in one place, without having to specifically configure each computer on the network in a different way.
In the absence of both an administrator (to assign a static IP address) and a DHCP server, the operating system may still assign itself a dynamic IP address using Zeroconf. These IP addresses are known as link-local addresses. For IPv4, link-local addresses are in the 169.254.0.0/16 address range.

Uses of dynamic addressing

Dynamic IP Addresses are most frequently assigned on LANs and broadband networks by Dynamic Host Configuration Protocol (DHCP) servers. They are used because it avoids the administrative burden of assigning specific static addresses to each device on a network. It also allows many devices to share limited address space on a network if only some of them will be online at a particular time. In most current desktop operating systems, dynamic IP configuration is enabled by default so that a user does not need to manually enter any settings to connect to a network with a DHCP server. DHCP is not the only technology used to assigning dynamic IP addresses. Dialup and some broadband networks use dynamic address features of the Point-to-Point Protocol.

Uses of static addressing

Static addressing is essential in some infrastructure situations, such as finding the Domain Name Service directory host that will translate domain names to numbers (IP addresses). Static addresses are also convenient, but not absolutely necessary, to locate servers inside an enterprise. An address obtained from a DNS server comes with a time to live, or caching time, after which it should be looked up to confirm that it has not changed. Even static IP addresses do change as a result of network administration.