The Internet is composed of many distinct networks, operated by independent Internet Service Providers (ISPs). The traffic and economic relationships of ISPs are mainly decided by their routing policies. However, in today's Internet, overlay routing, which changes traffic routing at the application layer, is rapidly increasing and this challenges the validity of ISPs' existing agreements. We study here the economic implications of overlay routing for ISPs, using an ISP interconnection business model based on a simple network. We then study the overlay traffic patterns in the network under various conditions. Combining the business model and traffic patterns, we study the ISPs' cost reductions with Bill-and-Keep peering and paid peering. We also discuss the ISPs' incentive to upgrade the network under each peering strategy.

In this article, we survey current and next generation IX (Internet eXchange) technologies. An IX is a mechanism to interconnect many networks to each other. In other words, an ISP can establish 'peerings' with other ISPs by connecting their routers into IXes. First, we describe the basic IX model, including a policy model, called the 'bilateral' model, which allows participating ISPs to control routing policy and traffic on a 'peer' basis. Next, we classify current IX architectures from a technical point of view and discuss issues of current IXes. In the latter potion of this article, we describe next generation IX technologies, which achieve new features for IXes, such as: enabling larger volume traffic exchange with optical technology, providing virtual private peerings, migrating data-link media to participate into an IX, and exchanging traffic over widely distributed areas. We survey cutting-edge technologies for next generation IXes, and discuss the future of IX technology.