Peering and Transit

Internet Service Providers (ISPs) interconnect with other ISPs and content providers by entering into “transit” or “peering” arrangements.


Transit is an arrangement in which larger ISPs sell access to their networks, their customers, and other ISP networks with which they had negotiated access agreements.

Internet Transit can be thought of as a pipe in the wall that says “internet this way” [1]. All one needs to do is pay for the Internet Transit service and all traffic sent to the upstream ISP is delivered to the Internet. The upstream ISP also advertises its relationship with the buying ISP to ensure its ISP customer gets traffic. The transit provider charges on a metered basis, measured on a per-Megabit-per-second basis.


Peering is often, but not always, a free arrangement (also known as “Sender Keeps All” or “Bill and Keep”), with each side deriving about the same value from the reciprocally arrangement. This suggests that the ISPs have similar   characteristics and traffic volumes. They rarely publicly disclose the criteria they use to qualify requests for peering [2]. If there is not equal value, sometime one party of the other pushes for a Paid Peering [3] relationship.

Peering is not a transitive relationship. WestNet peering with MidNet and EastNet peering with MidNet does not mean EastNet customers can reach WestNet customers. WestNet only knows how to get to blue and green customers, and EastNet knows how to reach only blue and red customers. The fact that they both peer with MidNet is inconsequential.



[1] Bill Norton is an authority on peering/transit arrangements and this practice note draws on his site at  

[2] A review of 28 peering policies is at

[3] Paid Peering is like (settlement-free) Peering except that there is something of value exchanged besides traffic and routes. With paid peering, one side extracts additional concessions in the form of a metered rate, or one side pays for the transport for the other, or one side has to pay for transport and colocation, etc.

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