Transit
When you buy IP transit, your provider carries your traffic to and from the entire internet. You pay, usually per megabit at the 95th percentile. Transit gives full reachability with one relationship.
Settlement-free peering
Two networks agree to exchange traffic destined for each other’s networks and customers, without either paying. It is common between networks of similar value to each other, and at exchanges through route servers.
Paid peering
Sometimes one network pays another for a direct connection — typically when traffic or value is unbalanced. It gives direct access without full transit.
Scope matters
Peering only reaches the peer’s network and its customers, not the whole internet. That is why most networks still keep transit.
The usual strategy
- Transit for global reachability and backup.
- Peering at exchanges for the large share of traffic going to nearby networks.
- Private or paid peering for a few strategic partners.
Exchanges like Peer1IX make the peering portion easier and cheaper to grow.
