What is Peering? How Networks Interconnect
Peering is the arrangement between two autonomous systems to exchange traffic directly, without paying a third party to carry it. Peering, along with transit, is one of the two fundamental business relationships that determine how traffic flows across the internet.
Peering vs Transit
There are two ways networks exchange traffic:
- Peering (settlement-free) — Two networks agree to exchange traffic destined for each other's customers at no cost. Neither network pays the other. Each network only announces its own routes and its customers' routes to the peer.
- Transit — One network pays another (the transit provider) to carry its traffic to the rest of the internet. The transit provider announces the customer's routes to everyone and provides a "default route" to reach all destinations.
The distinction matters because it shapes AS paths. A peer only provides access to its own network and customers. A transit provider provides access to the entire internet.
Types of Peering
Public Peering
Networks connect at an Internet Exchange Point (IXP) and exchange traffic over the shared switching fabric. This is cost-effective because a single physical connection to the IXP provides access to many potential peers.
Private Peering
Two networks run a dedicated physical link (often a cross-connect in a data center) between their routers. This is used when the traffic volume between two networks is high enough to justify a dedicated link, offering better performance and capacity guarantees.
The Peering Hierarchy
The internet has a rough hierarchy based on peering relationships:
- Tier 1 networks — Large backbone providers that can reach every destination on the internet through peering alone, without purchasing transit from anyone. Examples include Lumen/Level 3 (AS3356), Arelion/Telia (AS1299), and NTT (AS2914).
- Tier 2 networks — Networks that peer with some networks and buy transit from others. Most large ISPs and content providers fall here.
- Tier 3 networks — Smaller networks that primarily buy transit and do little peering.
Seeing Peering in BGP Data
When you look up an ASN in the looking glass, the neighbors section shows its upstream (transit providers and peers) and downstream (customers) relationships. Networks with many upstreams and peers tend to have shorter AS paths and better reachability.