Marketing issues
Because there is no formal definition or authoritative body which determines who is and is not a Tier 1, the term is often misused as a marketing slogan rather than an accurate technical description of a network. Frequent misconceptions of the "tier hierarchy" include:
Tier 1 networks are closer to the "center" of the Internet.
In reality, Tier 1 networks usually have only a small number of peers (typically only other Tier 1s and very large Tier 2s), while Tier 2 networks are motivated to peer with many other Tier 2 and end-user networks. Thus a Tier 2 network with good peering is frequently much "closer" to most end users or content than a Tier 1.
Tier 1 networks by definition offer "better" quality Internet connectivity.
By definition, there are networks which Tier 1 networks have only one path to, and if they lose that path, they have no "backup transit" which would preserve their full connectivity.
Some Tier 2 networks are significantly larger than some Tier 1 networks, and are often able to provide more or better connectivity.
Tier 2 networks are "resellers" of Tier 1 networks.
Only Tier 3 networks (who provide Internet access) are true "resellers", while many large Tier 2 networks peer with the majority or even vast majority of the Internet directly except for a small portion of the Internet which is reached via a transit provider.
Because the "tier" ranking system is used in marketing and sales, a long-held though generally misguided view among customers is that they should "only purchase from a Tier 1". Because of this, many networks claim to be Tier 1 even though they are not, while honest networks may lose business to those who only wish to purchase from a Tier 1. The frequent misuse of the term has led to a corruption of the meaning, whereby almost every network claims to be a Tier 1 even though it is not. The issue is further complicated by the almost universal use of non-disclosure agreements among Tier 1 networks, which prevent the disclosure of details regarding their settlement-free interconnections.
Some of the incorrect measurements which are commonly cited include numbers of routers, route miles of fiber optic cable, or number of customers using a particular network. These are all valid ways to measure the size, scope, capacity, and importance of a network, but they have no direct relationship to Tier 1 status.
Another common area of debate is whether it is possible to become a Tier 1 through the purchase of "paid peering", or settlement-based interconnections, whereby a network "buys" the status of Tier 1 rather than achieving it through settlement-free means. While this may simulate the routing behaviors of a Tier 1 network, it does not simulate the financial or political peering motivations, and is thus considered by most Peering Coordinators to not be a true Tier 1 for most discussions.
[edit]Global issues
See also: Internet Exchange Point
A common point of contention among people discussing Tier 1 networks is the concept of a "regional Tier 1". A regional Tier 1 network is a network which is not transit free globally, but which maintains many of the classic behaviors and motivations of a Tier 1 network within a specific region.
A typical scenario for this behavior involves a network that was the incumbent telecommunications company in a specific country or region, usually tied to some level of government-supported monopoly. Within their specific countries or regions of origin, these networks maintain peering policies which mimic those of Tier 1 networks (such as lack of openness to new peering relationships and having existing peering with every other major network in that region). However, this network may then extend to another country, region, or continent outside of its core region of operations, where it may purchase transit or peer openly like a Tier 2 network.
A commonly cited example of these behaviors involves the incumbent carriers within Australia, who will not peer with new networks in Australia under any circumstances, but who will extend their networks to the United States and peer openly with many networks. Less extreme examples of much less restrictive peering requirements being set for regions in which a network peers, but does not sell services or have a significant market share, are relatively common among many networks, not just "regional Tier 1"s.
While the classification of "regional Tier 1" does hold some merit for understanding the peering motivations of such a network within different regions, these networks do not meet the requirements of a true global Tier 1 because they are not transit free globally.
that was my original conclusion 
