Peering
Peering is settlement-free, also known as "bill-and-keep" or "sender keeps all", meaning that neither party pays the other in association with the exchange of traffic; instead, each derives and retains revenue from its own customers.
An agreement by two or more networks to peer is instantiated by a physical interconnection of the networks, an exchange of routing information through the Border Gateway Protocol (BGP) routing protocol, tacit agreement to norms of conduct and, in some extraordinarily rare cases (0.07%), a formalized contractual document.
[4] The CIX infrastructure consisted of a single router, managed by PSI, and was initially located in Santa Clara, California.
The router was later moved to the Palo Alto Internet Exchange, or PAIX, which was developed and operated by Digital Equipment Corporation (DEC).
When the United States government de-funded the NSFNET backbone, Internet exchange points were needed to replace its function, and initial governmental funding was used to aid the preexisting MAE and bootstrap three other exchanges, which they dubbed NAPs, or "Network Access Points," in accordance with the terminology of the National Information Infrastructure document.
During the dot-com boom, many exchange point and carrier-neutral colocation providers had plans to build as many as 50 locations to promote carrier interconnection in the United States alone.
Essentially all of these plans were abandoned following the dot-com bust, and today it is considered both economically and technically infeasible to support this level of interconnection among even the largest of networks.
A few exchange points, particularly in the United States, are operated by commercial carrier-neutral third parties, which are critical for achieving cost-effective data center connectivity.
[11] Private peering is the direct interconnection between only two networks, across a Layer 1 or 2 medium that offers dedicated capacity that is not shared by any other parties.
Early in the history of the Internet, many private peers occurred across "telco" provisioned SONET circuits between individual carrier-owned facilities.
Examples of this include forcing traffic via a path that does not have enough capacity to handle the load, or intentionally blocking alternate routes to or from the other network.
Some notable examples of these situations have included: The "donut peering" model[24] describes the intensive interconnection of small and medium-sized regional networks that make up much of the Internet.
[1] In multilateral peering, an unlimited number of parties agree to exchange traffic on common terms, using a single agreement to which they each accede.
Other important but smaller exchange points include AMS-IX in Amsterdam, LINX and LONAP in London, and NYIIX in New York.
A great deal of the complexity in the BGP routing protocol exists to aid the enforcement and fine-tuning of peering and transit agreements.
Hot-potato or nearest-exit routing, which is typically the normal behavior on the Internet, is where traffic destined to another network is delivered to the closest interconnection point.
[31] In 2001, the Federal Communications Commission's advisory committee, the Network Reliability and Interoperability Council recommended that Internet backbones publish their peering policies, something that they had been hesitant to do beforehand[citation needed].
[35] Countries with liberalized telecommunications and open markets, where competition between backbone providers occurs, tend to oppose ICAIS.
