Transport Level
On the Internet, the transport layer is realized by two protocols. The first is the Transmission Control Protocol (TCP) and the second is the User Datagram Protocol (UDP). Both break up a message that an application wants to send into packets and attempt to deliver those packets to the intended recipient. At the recipient's side, both take the payload from the received packets and pass those to the application layer.
The main difference between TCP and UDP is that TCP is reliable and UDP is not. TCP will collect incoming packets, put them in the right order and thereby reassemble the original message. If necessary, TCP requests retransmission of lost or damaged packets. UDP merely takes each incoming packet and delivers the payload (the original message) to the application layer. Any errors or out-of-order data should be taken care of by the application.
UDP is much faster than TCP, and so is mainly used for applications like audio and video streaming, where the occasional error is less important than getting all the data there at the right time. More generally, UDP is designed for applications that do not require the packets to be in any specific order. Because of this, UDP is sometimes called a "connection-less" protocol.
Taking the example of e-mail again, the e-mail client and server communicate over a reliable TCP connection. The server listens on a certain port (port 25) until a connection request arrives from the client. The server acknowledges the request, and a TCP connection is established. Using this connection the client and server can exchange data.
The content of this data is not really relevant at this level: that's the responsibility of the application layer. The e-mail message and all the other information exchanged at that SMTP application layer are merely payload, data that needs to be transported. Hence the name transport layer.
Protocols running at the transport layer are charged with providing several important services to enable software applications in higher layers to work over an internetwork. They are typically responsible for allowing connections to be established and maintained between software services on possibly distant machines. Perhaps most importantly, they serve as the bridge between the needs of many higher-layer applications to send data in a reliable way without needing to worry about error correction, lost data or flow management, and network-layer protocols, which are often unreliable and unacknowledged. Transport layer protocols are often very tightly-tied to the network layer protocols directly below them, and designed specifically to take care of functions that they do not deal with.
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