How the ‘Net Works: an Introduction to Peering and Transit

“In 2005, AT&T CEO Ed Whitacre famously told BusinessWeek, “What they [Google, Vonage, and others] would like to do is to use my pipes free. But I ain’t going to let them do that… Why should they be allowed to use my pipes?” The story of how the Internet is structured economically is not so much a story about net neutrality, but rather it’s a story about how ISPs actually do use AT&T’s pipes for free, and about why AT&T actually wants them to do so. These inter-ISP sharing arrangements are known as ‘peering’ or ‘transit’, and they are the two mechanisms that underlie the interconnection of networks that form the Internet. In this article, I’ll to take a look at the economics of peering of transit in order to give you a better sense of how traffic flows from point A to point B on the Internet, and how it does so mostly without problems, despite the fact that the Internet is a patchwork quilt of networks run by companies, schools, and governments.”


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