What is Internet Peering (BGP Peering)?
Internet peering is a connection between two IP networks that allow traffic to flow from sources in either of the networks to destinations in the other without allowing traffic to flow to destinations traversing the peer—or in other words, to travel via the internet.
Peering is configured using BGP (Border Gateway Protocol) which exchanges routing information between two systems, defined by their Autonomous System Numbers (ASNs). The configuration of BGP on both sides of the connection determines whether the connection is a “peering” or an “internet access/transit” type of connection.
Peering is an essential strategy for businesses that: (1) want to reduce their cost of transit, (2) want to reduce the complexity of their connection to a destination by connecting directly, (3) require higher network performance, (4) seek greater security.
Internet peering at a glance
- Definition: A direct connection between two IP networks that allows traffic to flow between them without traversing the broader internet
- Configured via: BGP (Border Gateway Protocol) between two autonomous systems (ASNs)
- Two types: Public peering (at internet exchange points) and private peering (dedicated cross-connects)
- vs. transit: Transit provides access to the full internet routing table for a fee; peering exchanges traffic directly between two specific networks
- Why it matters: Peering reduces transit costs, lowers latency, improves performance, and gives networks more control over how traffic reaches its destination
Kentik in brief: Kentik is the network intelligence platform that helps peering and interconnection teams make data-driven decisions. Kentik combines flow analytics, BGP routing data, and traffic cost attribution so teams can evaluate peers, optimize transit mix, build peering proposals, and measure the performance and economics of every interconnect.
Advanced edge optimization strategies for network engineers, planners, and peering pros
How does network peering work?
Network peering works by allowing devices on one network to exchange traffic directly with devices on another network. Peering provides more direct control over how you participate in the internet.
For example, a business might have an application hosted on-premises to download data from the public cloud. The application could access the data over the internet, the typical approach.
However, if the business sets up a peering connection between the on-premises location and the public cloud, data is downloaded directly without using the public internet. In other words, the data downloads without using third-party providers that do not provide the level of control needed.
Two types of interconnections: transit vs. peering
Let’s take a little broader view for a moment, just to put internet peering in context. Peering is a type of interconnection, and generally, there are two types of interconnections:
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Transit: The networks interconnect so that one (usually an ISP, telco, or carrier) can provide reachability to the entire Internet for the other, which is typically an “endpoint” entity (e.g., enterprise, content or application provider, residential broadband provider, etc.). In most cases, there is a commercial relationship. The endpoint entity pays the ISP to carry traffic to and from the Internet.
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Peering: The networks interconnect to exchange only traffic that originates or terminates within their networks (including the networks of their customers, in the case of carriers and Tier 1 networks).
Historically, peering was established between networks that found a mutual benefit from the connection without payments between the parties.
Two types of peering connections: public vs. private peering
In addition to the two types of interconnections, there are also two types of peering connections as you get deeper into how multiple networks connect. These two types are public peering and private peering.
Public peering
Public peering is done through an internet exchange point (IXP). This is where one network can peer with multiple networks through a single connection to the IXP to the IXP. The IXP can be a single ethernet switch or a multi-location ethernet network where the participants can connect and reach the other participants via the exchange. The BGP connections used for public peering can be to a route server, bilateral sessions to individual ASNs, or a combination.
Private peering
Private peering is when two networks agree to exchange their traffic directly via a dedicated IP connection. Private peering is often preferred when a massive amount of network traffic needs to be exchanged. The dedicated IP connection is typically created via a direct fiber between the two networks in a colocation facility where both have a presence, but can also be realized using dark fiber or transport between networks that do not have a common location, or via a virtual connection through a third-party network.
How to set up peering
For an IP network to peer, it needs an ASN (Autonomous System Number) and its own public IP address space. Peering is then configured using BGP (Border Gateway Protocol) which exchanges routing information between the two ASNs. BGP is also used for internet access when businesses have an ASN and their own address space. The configuration of BGP on both sides of the connection determines whether it is a peering or internet access/transit connection.
Typically a peering coordinator will then be responsible for managing the way an IP network connects to the rest of the internet. Learn more about essential methods, tips and tricks for connecting your IP network to the rest of the internet in Kentik’s ebook, The Peering Coordinators’ Handbook: Foundations of the Peering Trade.
BGP is used for the logical connection but needs a physical or virtual path between the two networks that connect. The most common approaches for this are:
- Establish a point of presence for the business’ network in a data center with the presence of IXPs, public clouds, and other networks and connect.
- Use a metro fiber or similar to connect to the IXP, the public cloud, or the network to whom you want to connect.
- Configure a virtual path on your internet access connection to the IXP, public, or the network to whom you want to connect.
Identifying and negotiating a peering agreement
The first task of network peering is to identify potential peering targets that will mutually benefit from a direct interconnection. For example, if a certain internet service provider (ISP) determines that a large volume of network traffic comes and goes from another ISP, they can decide to peer with each other to save costs or improve network performance. This type of network traffic analytics is typically done using NetFlow.
Once you’ve identified where the traffic is flowing, the next step is understanding how performance varies across networks and geographies so you can prioritize the right interconnections. Kentik enriches flows with ASN and geo metadata, so you can filter and compare traffic and performance by AS and region and see which providers and geographies deliver better latency, throughput or reliability for your users.
Once a potential peering partner is identified, the next step is to understand their peering policy and evaluate the potential for connection.
The basics of peering policies
A peering policy is a declaration of a network’s intentions to peer. A network can state if it has the following:
- Open peering policy - the network will peer with everyone and everywhere possible
- Selective peering policy - the network will generally peer, but there are a set of requirements that define how mutual benefit can be gained from peering
- Restrictive peering policy - the network will peer, but is not seeking new peers and will generally decline any requests
The peering prospects with an open peering policy are straightforward—it’s just a question of reaching out and agreeing on where and when. The same is often true for those peering prospects with a selective peering policy, but often one needs to prove that the policy requirements are met.
Once there is agreement, cross-connects must be run in the case of private peering and BGP sessions must be configured and brought into operation so that network traffic will flow.
The benefits of peering
By making it possible to avoid routing traffic over the internet, peering provides several significant advantages:
- Security: While peering doesn’t prevent all types of network-borne threats, it can reduce the risk of data sniffing and internet-based exploits.
- Performance: Since peering is a direct connection, latency and capacity are controlled by only the two parties in the relationship. For this reason, performance is often better than when routing via the internet and the internet service provider’s customers will have a better user experience. That performance advantage only holds if you can see when interconnects are approaching capacity and proactively rebalance before users feel it. Kentik’s flow analytics and utilization dashboards show real-time and historical bandwidth on transit and peering links and highlight top talkers, letting you identify interconnects that are trending toward saturation so you can upgrade or re-balance traffic before congestion and packet loss appear.
- Reliability: Similarly, peer networks may be more reliable because they won’t be disrupted by issues such as a DDoS attack against an ISP’s infrastructure.
- Lower costs: Peering provides a direct path to exchange traffic instead of sending that traffic through transit proviers. And although peering can require significant investment to implement, one can reduce ongoing operating expenses, especially when businesses have to pay high transit costs to send data over the public internet.
- Control: Connecting directly to the networks that provide critical service for you or your customers increases your control over quality-of-service. In cases where continuous, reliable network traffic is critical (e.g., video streaming), having control over performance is an essential service.
When to use peering
While peering provides many advantages, it’s not trivial to set up or manage. So, how do you decide if peering is the right choice for you and develop an understanding of potential peers and with whom to partner?
The simple and obvious answer is a financial one: it’s usually beneficial for companies to engage in network peering when it is cheaper to do so.
Related Kentipedia articles and Kentik resources
- What Is BGP? Border Gateway Protocol Explained
- BGP Routing: An In-Depth Tutorial and Examples
- What is VPC Peering?
- Network Traffic Analysis
- Reduce Network Spend
- Optimize Peering and Transit
FAQs about internet peering
What is internet peering?
Internet peering is a direct connection between two IP networks that allows them to exchange traffic without routing it through the broader internet. It is configured using BGP between two autonomous systems (ASNs) and is used to reduce transit costs, lower latency, and improve performance.
What is the difference between peering and transit?
Transit is a paid service where one network (typically an ISP) provides another network with access to the full internet routing table. Peering is a direct exchange of traffic between two specific networks — typically settlement-free or at much lower cost than transit. Transit gives you reach to the whole internet; peering gives you a faster, cheaper path to specific networks.
What is an internet exchange point (IXP)?
An IXP is a shared physical or virtual infrastructure where multiple networks connect to peer with each other through a single connection. IXPs make public peering efficient because one port at an exchange can provide access to dozens or hundreds of potential peers, rather than requiring a separate cross-connect to each one.
How do I decide whether to peer with a network or buy transit?
The decision comes down to traffic volume, cost, and performance requirements. If you exchange significant traffic with a specific network and that traffic is currently flowing over expensive transit, direct peering can reduce costs and improve latency. Kentik helps by showing traffic volumes by ASN and destination, so you can identify which networks would benefit most from a peering relationship and build a data-driven business case.
What data do I need to build a peering proposal?
A strong peering proposal typically includes traffic volume exchanged between the two networks, current routing paths and AS hops, geographic overlap (common facilities or IXPs), and the mutual performance or cost benefit. Kentik’s Peering & Interconnection workflows provide all of this — traffic ratios, AS path analysis, PeeringDB integration, and cost models — so you can build proposals backed by real data rather than estimates.
How does peering reduce latency and improve performance?
Peering eliminates intermediate networks (hops) between you and the destination. Fewer hops typically means lower latency, less jitter, and fewer points where packet loss or congestion can occur. Peering also gives you direct control over capacity on the interconnect, so you can size it appropriately and monitor it proactively — unlike transit paths where you have no visibility into congestion at intermediate networks.
How do I analyze performance differences by AS and region?
Enrich your flow data with ASN and geographic metadata, then filter and compare traffic by autonomous system or region to identify performance or cost differences across peers, transit providers, and geographies. Kentik supports this by automatically enriching every flow record with ASN, GeoIP, and provider context at ingest, so these comparisons are available on demand without manual tagging.
How do I detect saturation on interconnects before congestion occurs?
Monitor bandwidth utilization across transit and peering links using real-time and historical traffic analytics, and set dynamic or manual thresholds that alert when utilization trends toward saturation. Kentik supports this with flow-based interconnect dashboards that highlight top talkers and rising utilization trends, so you can schedule capacity upgrades or rebalance traffic before congestion and packet loss impact users.
What tools help compare internet paths across different providers?
Tools that combine flow data, ASN metadata, interconnect topology, and peering database information make it possible to compare path performance, AS hops, and provider mix across different ISPs or routes. Kentik supports this by fusing flow analytics with BGP path data and PeeringDB insights in a single platform, so comparisons that previously required spreadsheets and manual correlation happen in seconds.
How do ISPs optimize peering and transit to reduce latency and cost?
ISPs optimize peering and transit by analyzing traffic patterns, AS paths, and cost models to determine where to peer, which IXes to use, and how to balance traffic across transit and peering connections. Kentik supports this with Peering & Interconnection workflows that combine traffic ratios, latency data, path analysis, and PeeringDB-aware analytics — giving peering teams hard data to back up interconnection decisions instead of relying on guesswork.
Optimize your peering and interconnection strategy with Kentik
Kentik is the network intelligence platform that turns peering from a manual, relationship-driven process into a data-driven discipline.
- Get a demo — See Kentik’s peering analytics and traffic cost attribution
- Peering and Interconnection — Evaluate peers, optimize transit, and build data-driven proposals
- Optimize Peering and Transit — Reduce costs and improve performance across your interconnect portfolio
- BGP Route Monitoring — Monitor routing health across all your peering and transit sessions
- Reduce Network Spend — Calculate cost per bit and optimize your provider mix
