“It is important to distinguish between the concepts of an object, and the name(s) of that object. This has resulted in widespread confusion between the properties of the name, and those of the object itself.” A great line by J. Noel Chiappa and one very applicable to the process of Settlement Free Interconnection (SFI) or “peering” as it is commonly known.
When people say “peering” what they most often mean is a bi-lateral settlement free interconnection. This is a business term, not a technical term, because the properties of the interconnection are orthogonal to the business relationship that causes that interconnection to exist. What are these properties?
- Customer and network infrastructures routes (and only those routes) are exchanged
- Transit (peer routes, exchange routes) are not exchanged
From #1 and #2 above, only “on-net” routes are exchanged, which means that only “on-net” traffic destined for the network’s customers and infrastructure is exchanged.
That is the technical property of a “peering” session. The flow of money is orthogonal to the mechanics of interconnection. If there is a contract or some financial relationship between the two networks, then it is termed either Settlement Based Interconnect (SBI) or “paid peering.” The properties of the interconnect remain unchanged.
So to sum up, I would like to use the following terms for interconnection universally:
- Interconnection with “on-net” routes and no settlement: SFI
- Interconnection with “on-net” routes and settlements: SBI