FCIP encapsulates Fibre Channel and transports it over a TCP socket. FCIP is considered a tunneling protocol, as it makes a transparent point-to-point connection between geographically separated SANs over IP networks. FCIP relies on TCP/IP services to establish connectivity between remote SANs over LANs, MANs, or WANs. TCP/IP is also responsible for congestion control and management, as well as for data error and data loss recovery.

An advantage of FCIP is that it can use TCP/IP as the transport while keeping Fibre Channel fabric services intact.