Companies that own their own infrastructure; e.g. literally the fiber across town, may only need to pay the peering fees. Some of the peering sites in the US ar

Companies that own their own infrastructure; e.g. literally the fiber across town, may only need to pay the peering fees. Some of the peering sites in the US are non profit, and as such these companies that own their own infrastructure are able to connect at-cost, or even at no cost [1]. I have no doubt that large companies take advantage of the above fact to get their internet "free" [2]. Now, there are still very significant costs in getting fiber to the peering sites, whether they trench it or lease it, and there are also the costs of the higher end routers, engineers to maintain them, etc. So, probably it is more cost effective to buy "regular" internet services for many small to medium office locations. There is a decent article in Wired [2009] that explains how Google likely leverages all this to significantly reduce their bandwidth costs for YouTube [2]. [1] - http://www.phoenix-ix.net/aboutus.html http://www.phoenix-ix.net/aboutus.html [2] - http://www.wired.com/2009/10/youtube-bandwidth/ http://www.wired.com/2009/10/youtube-bandwidth/