Internet exchange point

[3][4] The National Science Foundation let contracts supporting the four NAPs, one to MFS Datanet for the preexisting MAE-East in Washington, D.C., and three others to Sprint, Ameritech, and Pacific Bell, for new facilities of various designs and technologies, in New York (actually Pennsauken, New Jersey), Chicago, and California, respectively.

This transition was particularly timely, coming hard on the heels of the ANS CO+RE controversy,[6][7] which had disturbed the nascent industry, led to congressional hearings,[8] resulted in a law allowing NSF to promote and use networks that carry commercial traffic,[9] prompted a review of the administration of NSFNET by the NSF's Inspector General (no serious problems were found),[10] and caused commercial operators to realize that they needed to be able to communicate with each other independent of third parties or at neutral exchange points.

[11] Today, the phrase "Network Access Point" is of historical interest only, since the four transitional NAPs disappeared long ago, replaced by hundreds of modern Internet exchange points, though in Spanish-speaking Latin America, the phrase lives on to a small degree, among those who conflate the NAPs with IXPs.

However, a connection to a local IXP may allow them to transfer data without limit, and without cost, vastly improving the bandwidth between customers of such adjacent ISPs.

Asynchronous Transfer Mode (ATM) switches were briefly used at a few IXPs in the late 1990s, accounting for approximately 4% of the market at their peak, and there was an attempt by Stockholm-based IXP NetNod to use SRP/DPT, but Ethernet has prevailed, accounting for more than 95% of all existing Internet exchange switch fabrics.

Fees based on the volume of traffic are less common because they provide a counterincentive to the growth of the exchange.

Internet traffic exchange between two participants on an IXP is facilitated by Border Gateway Protocol (BGP) routing configurations between them.

When these conditions are met, and a contractual structure exists to create a market to purchase network services, the IXP is sometimes called a "transit exchange".

Advocates of green broadband schemes and more competitive telecommunications services often advocate aggressive expansion of transit exchanges into every municipal area network so that competing service providers can place such equipment as video on demand hosts and PSTN switches to serve existing phone equipment, without being answerable to any monopoly incumbent.