An Internet exchange tip (IX or IXP) is a physical infrastructure that allows various Internet Service Providers (ISPs) to exchange Internet traffic between
their networks by means of joint peering agreements, which allow traffic to be exchanged without cost. IXPs reduce the piece of an ISP's traffic which must
be delivered via their upstream transit providers, thereby plummeting the Average Per-Bit Delivery Cost of their service. Furthermore, the enlarged number
of paths learned through the IXP improves routing competence and fault-tolerance. The primary reason of an IXP is to allow networks to interconnect
directly, via the exchange, rather than through single or more 3rd party networks. The advantages of the direct interconnection are several, but the primary
reasons are cost, latency, and bandwidth. Traffic passing through a switch over is typically not billed by any party, whereas traffic to an ISP's upstream
supplier is. The straight interconnection, often in the same city as both networks are located, often passes up data having to travel to other cities to get from
one network to another. This reduces latency. The third advantage, speed, is most noticeable in areas that have badly developed long-distance connections.
ISPs in these regions strength have to pay between 10 or 100 times more for data transport than ISPs in North America, Europe or Japan. Therefore, these
ISPs classically have slower, more restricted connections to the rest of the internet. However, a connection to a local IXP may allow them to transmit data
without limit, and without cost, vastly improving the bandwidth between customers of the two neighboring ISPs.