Editing Peering (section)

==Peering and BGP==
A great deal of the complexity in the [[BGP]] routing protocol exists to aid the enforcement and fine-tuning of peering and transit agreements. BGP allows operators to define a policy that determines where traffic is routed. Three things are commonly used to determine routing: local-preference, [[multi exit discriminator]]s (MEDs) and [[AS-Path]]. Local-preference is used internally within a network to differentiate classes of networks. For example, a particular network will have a higher preference set on internal and customer advertisements. Settlement free peering is then configured to be preferred over paid IP transit.

Networks that speak BGP to each other can engage in multi exit discriminator exchange with each other, although most do not. When networks interconnect in several locations, MEDs can be used to reference that network's [[interior gateway protocol]] cost. This results in both networks sharing the burden of transporting each other's traffic on their own network (or ''[[Cold-potato routing|cold potato]]''). ''[[Hot-potato routing|Hot-potato]]'' or nearest-exit routing, which is typically the normal behavior on the Internet, is where traffic destined to another network is delivered to the closest interconnection point.