A puzzle for newcomers
If two networks exchange large volumes, why does nobody pay? Because each side gets value it would otherwise have to buy.
The access network’s view
An ISP’s subscribers want content. Delivering that content via peering avoids transit costs and improves user experience.
The content network’s view
A content platform wants to reach users quickly and reliably. Peering with the ISP gives a direct path to those users without paying transit.
Cost structure
Transit is priced per megabit. Peering costs are mostly fixed: a port, a cross-connect and router capacity. As traffic grows, the per-megabit cost of peering falls.
When it is not free
If one side gains much more value than the other, paid peering may be negotiated. But for most relationships at exchanges, mutual benefit makes settlement-free the norm.
The role of exchanges
Exchanges lower the fixed cost: one port and two route server sessions connect you to many peers.
