Interconnect agreement

Interconnect agreements are necessary when different telecommunications organizations interconnect. Interconnect agreements are found both in the public switched telephone network and the Internet. In the public switched telephone network, interconnect agreements invariably involve settlement fees based on call source and destination, connection times and duration, although these fees often cancel out between operators. On the Internet, where the concept of a "call" is generally hard to define, settlement-free peering and Internet transit are the commonest forms of interconnection.

Interconnect agreements are typically complex contractual agreements, involving payment schemes and schedules, coordination of routing policies, acceptable use policies, traffic balancing requirements, technical standards, coordination of network operations, dispute resolution, etc. Legal and regulatory requirements are often an issue: for example, network operators may be forced by law to interconnect with their competitors.

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