Hi Bill,
I can see no justification under any circumstances why any provider would refuse to peer with another at an established exchange point for exchanging their _own_ customers' traffic!
I can give you three: 1/ LargeISP does not want to spend the X hours it takes to bring up a peering session for SmallISP's routes. The benefit gained to SmallISP's 5 routes is not great enough. 2/ LargeISP does not have confidence in SmallISPs ability to properly administer a safe BGP peering connection, and believes that there is high risk involved with such. 3/ LargeISP knows that if they don't peer with SmallISP, their customers won't care. LargeISP knows that if SmallISP can't get traffic to LargeISP, they will have a poor service. LargeISP knows SmallISP will then/therefore buy peering/transit (prolly from them). [this perpetuates the small number of global palyers model] I don't see that this is necessarily "correct" justification, but it is justification. -alan