When your ISP claims the Internet Speed to your home is 100 megabits, they are most likely referring to the speed of the link between your home and their Network Operations center ( depicted by the Green lines in the diagram above) . Typically you do not share this link anybody else , hence you truly do have a dedicated 100 megabit link as per their claims. The caveat is this speed can only be reliably attained when you are accessing data from their Network Operations Center or from another user also hosted by your ISP .
Now, notice the little Purple circle called (IX) in the diagram. This is called an Internet exchange point. It is a choke point where ISPs exchange data to and from each each other. For example, if you are accessing a Web site hosted in France , most likely you will go through one or more IX points to get to your data. Unless you are in France of course , but our assumption is that you are not in France .
Your ISP hates it when you go through their exchange point to access a remote server for a couple of reasons.
- They have to pay money if they originate more data, from their network than the other ISPs using the exchange point.
- Exchange points are bottle necks with limited capacity, and if too many users go through it at the same time, their speeds will degrade. For example, if you try to download a big file from the server in France while other users from your ISP are going out to other countries, the speed of your download cannot be guaranteed. And most likely will not be any where near your 100 megabit promise during peak usage hours.
So why should you care about Internet Exchange Points and how does that impact your Internet speed ?
The answer is it depends on how you use the Internet.
ISPs have gotten very smart , and keep copies of most content local in their NOC or within their Network.The average consumer is not likely to suffer degradation if they stick to commonly used content. Netflix is a good example. There is no one big Netflix server in Cyber space, there are in fact, many copies of Netflix servers , and one or more are located at your local ISP. So if you use the Internet to watch popular content from Netflix, then you will likely get your advertised Internet speed.
If you are an old timer like me, you might want to explore avant-garde content not available from Netflix, you will likely run into some issues with streaming video. For me with my ISP it is hit or miss. During their off peak hours I usually have no trouble, but many times I am unable to get reliable video from distant servers during peak hours.
The next time that you get a promotional advertisement from an ISP touting their service, ask the sales rep about the throughput you will get going through their exchange server on your way to France and see what they say :)
References IXP toolkit.org
NetEqualizer News Blog 
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