A peering agreement
|“||between ISPs allows each party to access the other's customers. Peering usually occurs between providers that are roughly equal in size. Peering agreements apply at a common location, giving each ISP access to the other's customers. A peering agreement obligates a provider to advertise all of its customers' routes to all other participating ISPs and to accept customer routes advertised by these other providers. Smaller ISPs typically have peering agreements only at IXPs.||”|
Problems with peering agreements
While these agreements were not a problem in the early days of the Internet when virtually all ISPs were approximately the same size, as time went on, and many new, smaller ISPs entered the market, some of the larger Internet backbone providers did not believe that these agreements were appropriate, since they result in the large provider subsidizing the telecommunications costs of the smaller ISP. In the spring of 1997, Uunet Technologies, Inc. created a furor by indicating that it would no longer honor peering agreements with small ISPs and would charge them for access to its network. Such a course, if adopted generally, would have driven many of the smaller ISPs out of business and could have balkanized the Internet — creating situations where users of some ISPs could not get access to certain websites on ISPs with which they had no peering agreement.