[soneil]

'local' is pretty fluid in this context. If you can route from A to B without leaving the provider's network, it's 'local enough' for this usage. So if they have their own trunks from one city to the next, customers within the entire country could be 'local enough'. If they use someone else's backbone between cities, then 'local enough' would just be each city.

They're not actually concerned with physical distance, the number of hops, etc. It's simply the case that if they keep it entirely within the provider's network, the traffic costs the provider nothing. This is a huge win for the provider, so it's logical to 'share the win' with the end-customer to encourage such behaviour.