But, with settlement free peering between tier 1 ISPs, tier 2
ISPs having transit/paid peering with a tier 1 ISP will receive
routes from peers of the tier 1 ISP. There is transit traffic
exchanged between tier 1 ISPs over settlement free peering.
So, I don't think distinguishing transit from peering
meaningful for precise discussions.
Around here there are certain expectations if you sell a product called IP Transit and other expectations if you call the product paid peering. The latter is not providing the whole internet and is cheaper.
The so-called "tier" of a company is a meaningless term. Traffic will never traverse two settlement free peering links and this is true for "tier 1" ISPs as well. Paid peering is understood to be the same as a settlement free peering except for not being settlement free. Therefore a paid peering with an "tier 1" ISP will not provide any traffic that traverses their settlement free peering links with other "tier 1" ISPs. It is quite possible some "tier 1" ISPs do not see the point in providing such a product but then they just won't offer paid peering - only IP transit.
In more technical terms, no peering link, settlement free or for pay, has routes for the whole internet. If the peering had routes for the whole internet it would be IP transit. This is achieved by only announcing own customer routes on the peering links and _not_ announcing routes received from other peering links. You get access to their customers but you need to make other arrangements to get access to the rest of the internet.
> For smaller ISPs it works the other way around. An evil CDN could
> attempt to charge us, the small ISP. I am happy that is not
> happening.
Because of natural monopoly and PON, most access/retail ISPs
enjoy their domination in their own area regardless of their
sizes.
This is not true in our part of the world. The regulator is requiring all major last mile infrastructure owners to give access to reseller ISPs breaking that monopoly. My own company both owns infrastructure (FTTH and FTTB / apartment networks) and resell using FTTH / DSL owned by other companies. Plus we have three 5G networks providing an alternative and also breaking the monopoly.
Regards,
Baldur