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In computer networking, peering is a voluntary interconnection of administratively separate Internet networks for the purpose of exchanging traffic between the "down-stream" users of each network. Peering is settlement-free, also known as "bill-and-keep," or "sender keeps all," meaning that neither party pays the other in association with the exchange of traffic; instead, each derives and retains revenue from its own customers. An agreement by two or more networks to peer is instantiated by a physical interconnection of the networks, an exchange of routing information through the Border Gateway Protocol (BGP) routing protocol, tacit agreement to norms of conduct and, in some extraordinarily rare cases (0.07%), a formalized contractual document. In 0.02% of cases the word "peering" is used to describe situations where there is some settlement involved. Because these outliers can be viewed as creating ambiguity, the phrase "settlement-free peering" is sometimes used to explicitly denote normal cost-free peering. The first Internet exchange point was the Commercial Internet eXchange (CIX), formed by Alternet/UUNET (now Verizon Business), PSI, and CERFNET to exchange traffic without regard for whether the traffic complied with the acceptable use policy (AUP) of the NSFNet or ANS' interconnection policy. The CIX infrastructure consisted of a single router, managed by PSI, and was initially located in Santa Clara, California. Paying CIX members were allowed to attach to the router directly or via leased lines. After some time, the router was also attached to the Pacific Bell SMDS cloud. The router was later moved to the Palo Alto Internet Exchange, or PAIX, which was developed and operated by Digital Equipment Corporation (DEC). Because the CIX operated at OSI layer 3, rather than OSI layer 2, and because it was not neutral, in the sense that it was operated by one of its participants rather than by all of them collectively, and it conducted lobbying activities supported by some of its participants and not by others, it would not today be considered an Internet exchange point.

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An Internet service provider (ISP) is an organization that provides services for accessing, using, managing, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise privately owned. Internet services typically provided by ISPs can include Internet access, Internet transit, domain name registration, web hosting, Usenet service, and colocation. An ISP typically serves as the access point or the gateway that provides a user access to everything available on the Internet.

Internet backbone

The Internet backbone may be defined by the principal data routes between large, strategically interconnected computer networks and core routers of the Internet. These data routes are hosted by commercial, government, academic and other high-capacity network centers, as well as the Internet exchange points and network access points, that exchange Internet traffic between the countries, continents, and across the oceans.

Internet transit

Internet transit is the service of allowing network traffic to cross or "transit" a computer network, usually used to connect a smaller Internet service provider (ISP) to the larger Internet. Technically, it consists of two bundled services: The advertisement of customer routes to other ISPs, thereby soliciting inbound traffic toward the customer from them The advertisement of other ISPs' routes (usually but not necessarily in the form of a default route or a full set of routes to all of the destinations on the Internet) to the ISP's customer, thereby soliciting outbound traffic from the customer towards these networks.

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