Peering and Transit Agreements

Agreements that govern moving one entity’s data traffic over another entity’s network. With peering agreements, network owners allow each others’ traffic to move over their networks at no cost or in some kind of cost-sharing arrangement. With transit agreements, the entity that wants to move the data (it may be an ISP or a content provider like Netflix) must pay the network owner to use their network. If a provider moves its own customers’ data on its own network (e.g., sending an email to someone served by the same provider), there are no fees. If two entities don’t have an agreement, the data may have to travel farther around on networks they do have agreements with, which can also slow traffic down.