What is peering?

Peering is a voluntary interconnection of administratively separate Internet networks for the purpose of exchanging traffic between the customers of each network. The pure definition of peering is settlement-free or "sender keeps all," meaning that neither party pays the other for the exchanged traffic; instead, each derives revenue from its own customers. Marketing and commercial pressures have led to the word peering routinely being used when there is some settlement involved, even though that is not the accurate technical use of the word. The phrase "settlement-free peering" is sometimes used to reflect this reality and unambiguously describe the pure cost-free peering situation.Scheme of interconnection and peering of autonomous systems

Peering requires physical interconnection of the networks, an exchange of routing information through the Border Gateway Protocol (BGP) routing protocol and is often accompanied by peering agreements of varying formality, from "handshake" to thick contracts.

The Internet is a collection of separate and distinct networks, each one operating under a common framework of globally unique IP addressing and global BGP routing.

The relationships between these networks are generally described by one of the following three categories:

 

 

Furthermore, in order for a network to reach any specific other network on the Internet, it must either:

 

 

The Internet is based on the principle of global reachability (sometimes called end-to-end reachability), which means that any Internet user can reach any other Internet user as though they were on the same network. Therefore, any Internet connected network must by definition either pay another network for transit, or peer with every other network who also does not purchase transit.