an Internet exchange point

If networks could only connect by buying private links to each other one pair at a time, the Internet would be a tangle of expensive point-to-point cables. An Internet exchange point, or IXP, solves this the way an airport hub solves flights: instead of every city flying direct to every other city, airlines all meet at a shared hub. An IXP is a shared physical location — usually a big switch (or set of switches) in a data centre — where many networks plug in and can then exchange traffic with each other directly.

Concretely, an IXP operates a fast layer-2 switching fabric. Each member network connects a router into that fabric (say a 100 Gbps port). Once connected, any two members can set up a BGP peering session across the shared switch and start handing each other traffic — without the cost and delay of routing it through a third-party transit provider. One physical connection to the IXP gives potential access to hundreds of other networks present there; the largest IXPs (in Amsterdam, Frankfurt, London, São Paulo, and elsewhere) carry many terabits per second at peak.

IXPs matter because they make the Internet cheaper, faster, and more local. Keeping traffic between two nearby networks at a local IXP — instead of hauling it to another country and back to reach a transit provider — cuts both cost and latency, and keeps regional traffic regional. The IXP itself is usually a neutral operator that just runs the switch; it does not get involved in the business deals or BGP policies between the members, who decide privately whom to peer with.