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For BGP AS relationship, I have the following explanations:

  1. Prefer routes in which the next-hop AS is a customer over routes in which the next-hop is a peer. Prefer routes in which the nexthop AS is a peer over routes in which the next-hop is a provider.

  2. AS prefers to use customer path, then peer, then provider.

And I know that peer-to-peer means two entities agree to provide free routing service to each other.

But I still cannot understand above explanations well. Please give me an example to explain it.

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    Please provide the source of these quotes. Without the context, it's hard to give you a useful answer. – Ron Trunk Apr 4 '17 at 12:10
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These are typical routing policies used by providers based on a business decision. Customers pay you money. Peers are free (generally speaking). Providers cost you money. Thus, if you receive the same prefix from all three connections, you would have a routing policy (local-pref) to prefer the customer connection over the peer connection, and the peer connection over the provider connection.

The more bandwidth used on the customer connection, the more the customer has to pay you. The more bandwidth you use on the provider connection, the more you have to pay the provider.

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