Two types of IP networks are used to provide services:
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The public Internet
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Managed IP networks
2.3.1 The public Internet
The Internet is a network of interconnected networks run by different parties, but made to appear to a large extent as a single network. The Internet was conceived from the computer data communications culture and has four primary characteristics:
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a service creation environment where the network is basically open and services are created at the network edge with the interior of the network having minimal functionality
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a common public addressing system such that packets pass unaltered between networks. (This ideal has is not achieved when network address translators are used for the connection of end networks but it remains true for other networks and is still seen as a fundamental design goal of the Internet)
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a common server system (Domain name system) for resolving the names used by users to identify destinations into IP addresses so that routeing can be end-end
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funding by arrangements that are not related to calls
In practice there are two types of network:
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Backbone networks that provide a global mesh of interconnectivity (example are Genuity, UUNET (Worldcom), Sprint, AT&T, Cable & Wireless)
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Internet Service Providers who provide access to the Internet and some services (examples are Freeserve, BT Internet, AOL, LineOne, and Compuserve). Customers access the ISPs either by dial-up or leased line.
Points of interconnection between IP networks are commonly provided at special sites (telecom hubs) that are served by large capacity optical fibres and where different operators can rent space and support services.
Each IP network is made up of interconnected routers, which switch the packets of information.
The situation is shown in figure 12.
Figure 12: Structure of the Internet 
The flow of money is from customer to ISP to backbone network. “Horizontal” connections between ISPs, and between backbone operators are normally made on a peering basis without payments provided that the traffic is not grossly imbalanced.
The public Internet is growing very rapidly and having difficulty in keeping pace with demand, with the result that the quality of service is poor at times when traffic loads are high.
Managed IP networks come from the telecommunications culture. They are similar in principle to the Internet in that they also use routers and are interconnected with other networks. However they differ in that they:
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Are essentially closed and support only specific services that are created by the network operator or a service provider who uses a service creation platform provided or enabled by the network operator. Being "closed" means that the networks carefully control the traffic that they accept from other networks and protected themselves at their edges by firewalls
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May use their own private internal addressing system and may alter the addresses used in packets when they pass across network boundaries
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Are normally dimensioned and managed to provide better quality of service
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Commonly provide more detailed traffic management and may support call related charging
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May offer defined levels of quality of service such as maximum delay instead of what is called “best efforts”.
In terms of the current state of development, a number of large telcos and consortia of telcos are running global managed IP networks. However it is important to realise that these networks have very few if any interconnections at the IP level. They may provide PSTN and Internet access but many of their services are available only on-net. There are several reasons for this situation:
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The network operators are aiming initially at the large corporate market with VPN and intra-enterprise services (eg interconnection of LANs at different sites) and are aiming to obtain large market share by offering special on-net services. They are not focusing on any-any connectivity.
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The state of the standards at present does not support service interoperability at the IP level or interoperability between equipment from different vendors, because not all the standards are sufficiently precise (H.323 related standards are generally much better than SIP related ones). It may take 2-3 years before the standards achieve the quality needed for interoperability. The operators of these networks are therefore having to obtain some groups of equipment from the same vendor.
A telco that is migrating from circuit switched to packet would almost always use an ATM or managed IP network rather than the Internet
2.3.3 Comparison
Figure 13 summarises the differences between the Internet and managed IP networks.
Figure 13: Comparison between the Internet and managed IP networks
| Internet | Managed IP | Approach | Open = unrestricted access and use | Closed = restricted access and use | | | At network edges by users or independent third parties | Within or at the edge of networks but only where enabled by the operator | Charging | Subscription or traffic volume | | Connectivity at the IP level | Full interconnection | Hardly any at present | Addressing | | Internal private addressing possible | Quality of service | Not managed | Managed to support defined levels |
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