Internet Exchange

An Internet exchange point (IX or IXP) is a 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 which 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 to that, 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 advantages of the direct interconnection are numerous, but the primary reasons 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.

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