Peering is a procedure that allows two Internet Service Providers(ISPs) to exchange traffic between one another's customers. This eliminates the need to buy the services of a third party to transfer the traffic across the internet for them. It makes it a cost effective method rather than relying on an outsider. It also gives them more control on their traffic flows.
Peering is a process that interconnects physical networks. Public peering is done where all the networks connect to through the internet exchange in a colocation facility. Private peering is a process where two networks are connected with a router but run on a cable instead of the Ethernet switch. This practice is usually followed when there is a large volume of traffic that cannot be managed in a shared connection. The requirements for peering include- a connection to an exchange point via a router or an Ethernet circuit connecting equipment between the two Internet Service Providers. The router information is exchanged through the Border Gateway Protocol (BGP). The two providers connect to each other at network focal points and local switching points. Peering initially started as a free setup but in recent times many of the larger ISPs now have started the practice of charging the smaller ISPs. Peering helps in controlling heavy traffic flow and ensures better performance.