Internet Exchange Points (IXPs) are physical places where many different networks connect to one another and pass traffic between one another. The Internet is a collection of different networks. To make up a single Internet, every network must have a path to every other network. This is happens by networks connecting to one another. IXPs are locations where these connections take place.
Networks have different options for connecting to one another. The most expensive of these is to build out fiber optic cables between Company A’s building and company B’s buildings. These different buildings could be miles and miles away from one another. Not only is it expensive to run this fiber, but it is more difficult to troubleshoot such long connections.
A different option is to connect the two networks if the networks both have equipment within the same building. These buildings are called Internet Exchange Points. Usually these locations are decided for historical reasons. If two large networks were already in or near a certain building, additional networks who wanted to connect to those two large networks would build out to that building. Once such a location is established, it is all but impossible to move it. If there are many networks within a building already, new networks will want to move into this same building rather than trying to get the existing networks to move into a new building.
Many exchange points are controlled by companies such as Equinix. These companies do not run their own networks and are not network providers. The are considered neutral because they do not compete with the participants of the Internet Exchange. This is opposite to Exchange Points which are run by companies such as AT&T, who is on the one hand running the exchange, and on the other a competitor to the other networks.
These carrier neutral Internet Exchange Points, such as those run by Equinix, charge fees for moving into their buildings and for other services within the Exchange Point. This includes colocation and cross connect fees. Rather than competing with the networks that have a presence in an exchange point, companies such as Equinix, Cologix, etc. charge for the infrastructure they provide. Networks pay money to the IXPs for providing a convenient way to connect to other networks. IXPs provide a switch that allows all the different networks to connect to each other. Each networks only needs a single port, which is connected to the switch. The switch then allows them to send traffic to every other network connected to the switch.
This type of peering over an exchange is usually settlement free peering, with the networks not charging one another anything. When engaging in settlement free peering, networks usually only share a limited amount of routes with one another. However, it is also possible to purchase IP transit over the exchange which would provide a whole view of the Internet.
Along with this switch fabric that the IXPs provide for different networks to connect to one another, they also allow cross connects directly between members’ equipment. This means that two networks can connect to one another directly, without going over any switch. From one router to another. This type of private peering can either be paid IP transit or it can be free private peering. When present at a location with multiple networks, you can easily purchase IP transit from multiple uplinks. It is up to the two networks to decide the terms between themselves, the IXP only providers the cross connects and other equipment needed for the connection to take place.
So in sum, an IXP is a (often neutral) location where different networks can connect to one another in a manner of different ways.
