That's how it works; no large telco I've ever worked for is willing to put third party gear (or really any gear that hasn't gone through extensive validation) into their head ends. An IXP is just a datacenter that the big ISPs and transit providers use to exchange traffic. The business agreements determine the price paid (which in some cases is zero, but often not, and is negotiated like any other business deal).
> The business agreements determine the price paid (which in some cases is zero, but often not, and is negotiated like any other business deal).
I do not understand this part: why is a business agreement necessary to simply discover BGP paths?
There is an ISP with users that want to go to Youtube or Akamai: the ISP has a router with the full BGP prefix list of the Internet, including for those of YT and A. YT and A are probably in most of the larger IXPs, and presumably the ISP in question is also at a few IXPs.
Why would a business agreement be necessary for the ISP to send traffic over the IXP's switches to the CDN(s)? What's the point of connecting into an IXP if you add the 'overhead' of business agreements?
> Why would a business agreement be necessary for the ISP to send traffic over the IXP's switches to the CDN(s)?
Because that's how distribution works and has always worked under corporate capitalism: the company making money off the content itself pays to distribute it (on the Internet, this is generally understood to be the originator of the packets). So the ISPs charge the CDNs and companies like Netflix to accept their traffic. A common argument is "well I already pay for that as a customer!" Telecom business models are a lot more complicated than that, and if 100% of their revenue came from subscription fees you'd be paying a lot more than you do now.
> What's the point of connecting into an IXP if you add the 'overhead' of business agreements?
Because it's a convenient location to house network gear with easy access to multiple large ISPs and upstream networks? An IXP is just a datacenter. What makes it an IXP is the fact that multiple large telco networks are hosted there.
From the wikipedia article linked above: "The Vancouver Transit Exchange, for example, is described as a 'shopping mall' of service providers at one central location, making it easy to switch providers, 'as simple as getting a VLAN to a new provider'. The VTE is run by BCNET, a public entity."
I am aware of paying for transit, which allows you to access larger swaths of the Internet through someone else's (better connected) network.
But if I am with an ISP A, and I want to watch something on YouTube, then given that I am paying my ISP for connecting me to "the Internet", and YT is on "the Internet", how/why would YT pay the ISP anything?
How exactly would an ISP charge a CDN, YT, or Netflix? The content distributors simply connect to the Internet and advertise via BGP: besides paying their own ISP(s), how would a content provider pay a 'distant ISP'? If a content provider is willing to pay for dark fibre and install their own gear into IXPs, how would any ISP issue an invoice to the CDN(s)?
And the "transit exchange" at VanIX seems to be separate from the open peering option available by simply advertising to the router servers. From the sentence right before the one you quote:
> When these conditions are met, and a contractual structure exists to create a market to purchase network services, the IXP is sometimes called a "transit exchange".
TorIX has the majority of participants doing simple peering:
> The Exchange also offers two BGP Route-Servers, which allow peers to exchange prefixes with each other while minimizing the number of direct BGP peering sessions configured on their routers.[3] Participation is voluntary, with approximately 85 percent of the membership using the free service.
CDNs can get closer to end-users by peering at Internet Exchange Points (IXPs).
* https://en.wikipedia.org/wiki/Internet_exchange_point
Maybe not as close/fast as right on an ISP's network, but probably closer than a trans-continent or trans-ocean hop.