"Tier 1" is pretty much such a loaded/marketing term that it's about useless for any sort of technical evaluation.
The generally accepted meaning for "Tier 1" is a provider that does not pay for transit. This really doesn't have any direct correlation to the quality of service they provide, or how much bandwidth they might be willing to offer you. (And, in fact, peering with a single "Tier 1" provider exclusively for all connectivity can be dangerous, c.f. all of the various depeering disputes that Cogent likes to have with TeliaSonera, Level3, etc.)
That being said, all of the universities I have had interactions with did not get their bandwidth exclusively from anyone meeting the above definition of "Tier 1". (Edit: There might well be univerisities that do fall under that category, but certainly not all of them, and buying from a "Tier 1" provider or not is not a particularly meaningful way to characterise the quality of their network connectivity.)
That's pretty interesting, because I have always had a totally different notion of what Tier 1 means. If you characterize the internet as a tree, you can usually move up 2-3 steps from "guy with dial-up modem" before you get to a network which is so large that it is under peering agreements. At that point, the tree analogy breaks down, because that network has connections to "the internet" in more than just one single direction; that's the Tier 1 distinction I am referring to.
I realize that it's an imprecise definition, but you still have to admit that it would be pretty unrealistic for any Tier 1 network not to have ungodly amounts of bandwidth; I think it's safe to speculate that peering happens exclusively at the point where it's no longer reliable to measure the amount data being transferred.
