Networking for Nerds: Do You Know the Difference between IP Peering vs. IP Transit for Enterprise Internet Interconnection?

IP peering is a mutual exchange of data between two ISPs, and the amount of data exchanged is typically close to equal. The respective ISPs do not charge for this arrangement as both parties benefit equally — this is known as settlement-free, and it simply means that neither ISP will pay the other under an agreement. IP transit is when one entity pays another for the right to transit its upstream network. In this arrangement, one entity is