The first Internet exchange point was the
Commercial Internet eXchange (CIX), formed by
Alternet/
UUNET (now
Verizon Business),
PSI, and
CERFNET to exchange traffic without regard for whether the traffic complied with the
acceptable use policy (AUP) of the
NSFNet or ANS' interconnection policy. The CIX infrastructure consisted of a single router, managed by PSI, and was initially located in
Santa Clara, California. Paying CIX members were allowed to attach to the router directly or via leased lines. After some time, the router was also attached to the Pacific Bell SMDS cloud. The router was later moved to the
Palo Alto Internet Exchange, or PAIX, which was developed and operated by
Digital Equipment Corporation (DEC). Because the CIX operated at
OSI layer 3, rather than
OSI layer 2, and because it was not neutral, in the sense that it was operated by one of its participants rather than by all of them collectively, and it conducted lobbying activities supported by some of its participants and not by others, it would not today be considered an Internet exchange point. Nonetheless, it was the first thing to bear that name. The first exchange point to resemble modern, neutral, Ethernet-based exchanges was the
Metropolitan Area Ethernet, or MAE, in
Tysons Corner,
Virginia. When the United States government de-funded the
NSFNET backbone, Internet exchange points were needed to replace its function, and initial governmental funding was used to aid the preexisting MAE and bootstrap three other exchanges, which they dubbed NAPs, or "
Network Access Points," in accordance with the terminology of the National Information Infrastructure document. All four are now defunct or no longer functioning as Internet exchange points: • MAE-East – Located in
Tysons Corner, Virginia, and later relocated to
Ashburn, Virginia • Chicago NAP – Operated by
Ameritech and located in
Chicago, Illinois • New York NAP – Operated by
Sprint and located in
Pennsauken, New Jersey • San Francisco NAP – Operated by
PacBell and located in the Bay Area As the Internet grew, and traffic levels increased, these NAPs became a
network bottleneck. Most of the early NAPs utilized
FDDI technology, which provided only 100
Mbit/s of capacity to each participant. Some of these exchanges upgraded to
ATM technology, which provided
OC-3 (155 Mbit/s) and
OC-12 (622 Mbit/s) of capacity. Other prospective exchange point operators moved directly into offering Ethernet technology, such as
gigabit Ethernet (1,000 Mbit/s), which quickly became the predominant choice for Internet exchange points due to the reduced cost and increased capacity offered. Today, almost all significant exchange points operate solely over Ethernet, and most of the largest exchange points offer 10, 40, and even
100 gigabit service. During the
dot-com boom, many exchange point and carrier-neutral colocation providers had plans to build as many as 50 locations to promote carrier interconnection in the
United States alone. Essentially all of these plans were abandoned following the
dot-com bust, and today it is considered both economically and technically infeasible to support this level of interconnection among even the largest of networks. ==How peering works==