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... you almost got it right ... the secret is DIRECT PEERING. they have to try to push as much bandwith as they can to get into direct peering with others ... pretty hard to explain, but I guess some cogent based hosting guy will be able to uncover the secrets of direct peering here ...
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Jup, I guess that's what it's about. In Europe there are quite a few hub's where big providers talk between each other. And this is how it works (simplistic model).
ISP A: downloads 500pB from ISP B
ISP B: downloads 200pB from ISP A
Let's say that ISP A is an underdog and ISP B a big player. Let's say that these two ISP's peer trough 12Mb connection. What happens is, that traffic from B to A works fine, but from A to B it get's sluggish. Now ISP B has two options:
a) increase the gateway speed (big dough involved)
b) find some good websites that increase the traffic from B to A and increase the gateway speed with mutual agreement.
I don't know, whether there could be some good hosting opportunities with this. If someone get's a deal with a telco for hosting free, let us know!
Lionking