Say you need to reach www.rabelaisian-wit-is-pretty-dirty-stuff.com, and the relevant Web server sits in a Vladivostok data center. But Hyperlocal Internet, your Internet provider, has no direct connection to the Vladivostok hosting company's Internet provider. So how to send your request for a Web page across the Bering Sea?
Internet transit provides the answer: one ISP pays another well-connected network to deliver Internet traffic to networks with which the first ISP has no direct peering connection. (Read our primer on peering and transit.) Typically, such transit deals have been priced at a "blended rate" under which the transit provider charges a flat price per Mbps of connectivity; in other words, the transit providers charges for the size of the pipe it provides, regardless of how far the traffic is going or how high transit demand is at the moment.
To reach the Vladivostok ISP, Hyperlocal's transit provider might need to haul those bits across the US and perhaps over the Pacific before handing them off to another network in, say, Singapore, that can get them further along the way (this is called "off net traffic"). Such traffic imposes higher costs than if Hyperlocal's data is destined for one of the transit provider's own customers in Omaha (called "on net traffic"), for instance—yet the costs to Hyperlocal are the same either way with a blended rate.
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