In the lower layers the emphasis has been on the way in which the physical medium is used to transport bits of information and a reliable method for setting up a data link between two points. This layer is responsible for communication between adjacent nodes in the network, and the routing of packets from source to destination. Routes could be based on static tables built into the network - fixed paths between any two nodes - or they could be determined at the start of each conversation. In fact, they may even be dynamic - being determined anew for each individual packet, thus optimise the current network load.

When there are too many packets in the subnetwork (a physical network which may be only one in a series of such physical networks which links two or more end systems) congestion will occur - the control of this lies within the domain of the Network Layer.

Obviously the operators of the subnet may well expect remuneration for their efforts and hence often some accounting function must be incorporated into the Network Layer. At its simplest the software must count how many packets or characters or nits are sent by each customer, in order to provide information for billing. However, if a packet crosses a national border, with varying rates on each side, the accountancy becomes somewhat more complex.

Also, when a packet has to cross from one network environment to another, to arrive at its destination problems will arise. For example, the networks may use different standards for protocols, addressing or the packet size may be different. Consequently, it is the task of the Network Layer to overcome all these difficulties to allow heterogeneous (different) networks to be interconnected.

In broadcast networks the routing problem is simple and hence the Network Layer is somewhat reduced.

Services provided to the transport layer

• Network addresses are provided by the Network Layer and are used by transport entities to uniquely identify other transport entities
• Network Service data unit transfer - On a network connection, the Network Layer provides for the transmission of Network Service data units (e.g. packets of data). These units have a distinct beginning and end.
• Error notification - Unrecoverable errors detected by the Network Layer are reported to the Transport Layer
• Flow control - A transport entity which is receiving at one end of a network connection can cause the Network Service to stop sending data units.

Below are some of the functions within the Network Layer:

• Routing and relaying - Network connections are provided by network entities in end systems but may involve intermediate systems providing relaying.
• The error detection facilities are used to check that the quality of service provided over a network connection is maintained. Error detection in the Network Layer uses error notification from the Data Link Layer.
• Service selection - This function allows service selection to be implemented to ensure that the service provided at each end of a network connection is the same when a network connection spans several subnetworks of dissimilar quality

In conclusion, the Network Layer ensures that in a multi-mode network the blocks of data arrive at their correct destinations by use of the appropriate call set and routing procedures.