What is Peering?

Peering is the voluntary interconnection of two distinct autonomous networks (Autonomous Systems, or ASes) so that they can exchange traffic for their respective customers and end users. Unlike transit, where one network pays another to reach the entire Internet, peering is usually settlement-free, meaning neither side pays the other for the traffic exchanged. The agreement is governed by bilateral or multilateral peering policies that specify technical and business requirements such as traffic ratios, geographic scope, and port capacity.

Peering happens at Internet Exchange Points (IXPs) or through private network interconnections (PNIs). At an IXP, multiple networks connect to a shared switch fabric and peer using the Border Gateway Protocol (BGP). A PNI is a direct physical link between two networks, often used when traffic volumes are high enough to justify a dedicated circuit. Both methods eliminate transit costs, lower latency, and improve end-user performance by keeping traffic on direct paths.

Peering is a cornerstone of the Internet's economic and routing architecture. Tier 1 networks (networks that can reach every other network without buying transit) rely heavily on settlement-free peering to maintain a global routing table. Smaller ISPs and content providers also peer to reduce costs and improve quality. Peering relationships can be contentious when traffic ratios are uneven, leading some networks to require paid peering, where one side compensates the other for unbalanced traffic flows.