Internet exchange point

An Internet exchange point (IX or IXP) is the physical infrastructure through which Internet service providers (ISPs) and content delivery networks (CDNs) exchange Internet traffic between their networks (autonomous systems). IXPs reduce the portion of an ISP's traffic that must be delivered via their upstream transit providers, thereby reducing the average per-bit delivery cost of their service. Furthermore, the increased number of paths available through the IXP improves routing efficiency and fault-tolerance. In addition, IXPs exhibit the characteristics of what economists call the network effect. The primary purpose of an IXP is to allow networks to interconnect directly, via the exchange, rather than through one or more third-party networks. The primary advantages of direct interconnection are cost, latency, and bandwidth. Traffic passing through an exchange is typically not billed by any party, whereas traffic to an ISP's upstream provider is. The direct interconnection, often located in the same city as both networks, avoids the need for data to travel to other cities (potentially on other continents) to get from one network to another, thus reducing latency. The third advantage, speed, is most noticeable in areas that have poorly developed long-distance connections. ISPs in these regions might have to pay between 10 or 100 times more for data transport than ISPs in North America, Europe, or Japan. Therefore, these ISPs typically have slower, more limited connections to the rest of the Internet. However, a connection to a local IXP may allow them to transfer data without limit, and without cost, vastly improving the bandwidth between customers of the two adjacent ISPs. A typical IXP consists of one or more network switches, to which each of the participating ISPs connect. Prior to the existence of switches, IXPs typically employed fiber-optic inter-repeater link (FOIRL) hubs or Fiber Distributed Data Interface (FDDI) rings, migrating to Ethernet and FDDI switches as those became available in 1993 and 1994. Asynchronous Transfer Mode (ATM) switches were briefly used at a few IXPs in the late 1990s, accounting for approximately 4% of the market at their peak, and there was an attempt by Stockholm-based IXP NetNod to use SRP/DPT, but Ethernet has prevailed, accounting for more than 95% of all existing Internet exchange switch fabrics. All Ethernet port speeds are to be found at modern IXPs, ranging from 10 Mb/second ports in use in small developing-country IXPs, to ganged 10 Gb/second ports in major centers like Seoul, New York, London, Frankfurt, Amsterdam, and Palo Alto. Ports with 100 Gb/second are available, for example, at the AMS-IX in Amsterdam and at the DE-CIX in Frankfurt. There are five types of business models for IXPs: