[beerbaron23]

> Lower tier isp’s usually pay the big guys for peering.

In most all cases they don't peer with the "big guys" they simply refuse. What they do is peer up with the local public peering exchange that's non profit/almost free, then the packets find the big guys on their own.

What the small isp's usually have to do is pay the big guys for use of the actual lines/access to the clients, as usually the big guys are the only ones allowed to run physical lines to houses ect, as in if everyone was allowed to run their own lines it would be a huge mess (see Mexico as an example for rats nests of cable lines placed by any company with the will to run them through the gauntlet)

[icedchai]

In most cases, lower tier ISPs just buy transit (wholesale internet) to another ISP, like HE, Level3, etc. The nearly mythical non-profit/almost free exchange you describe is going to be congested as hell.