Editor's Note: This article is based on comprehensive research of publicly available sources including official press releases, regulatory filings, consumer complaints, technical forum discussions, academic studies, and industry publications. I may have failed in some areas to grasp the issue entirely. The reader is advised that not everything might be correct and you should follow the sources and conduct your own research to get an adequate understanding of the subject at hand.

Before diving into the article: My parents' home has two internet connections - a Telefonica DSL line (50 Mbit/s down, 10 Mbit/s up) and a Vodafone cable connection (1 Gbit/s down, 40 Mbit/s up). Despite the Vodafone line offering 20× faster download speeds, it has been so unreliable at times during peak evening hours that we've configured the Telefonica DSL as the primary WAN on the UniFi router for the past month.

UPDATE 08.11.2025: Since the original article I've gotten a lot of feedback where the article might fall short. I still favour IXPs over NaaS (Network as a Service) providers because of the IXP's "public" nature. However I've since then gotten to better understand why the move to inter.link might ne good after all. I tried to work that perspective in at the end with a section "The case for the inter.link deal"

UPDATE 09.11.2025
I edited the article a little bit to get some details fixed. Most notably:
1.) I was mentioning DT as a good and a bad example, which did not really make sense.
2.): We need a common understanding. This is why there will be a series called "How the Internet works..." that tries to explain concepts and terminology.
3.) inter.link is actually quite well connected. Yes, they are a NaaS, but maybe this is a good thing for Vodafone customers after all.
4.) Vodafone maintains a private peering with YouTube (Heise got an update from Vodafone regarding this)
In the end I think the only real truth lays in the data. If Vodafone delivers, good for them.

UPDATE 09.11.2025 #2
I removed the section on Starlink as alternative, cause it seemed a little besides the point.

UPDATE 10.10.2025
1.) The Heise article, also linked by Theo Voss, got updated again to state that private peerings with HyperScalers will stay
2.) Also added a bit comparing current PeeringDb records

There's a reason your internet feels like magic. When you download the latest Ubuntu ISO in Berlin, that data doesn't travel some convoluted path through half of Europe to reach you. It normally flows through something called an "internet exchange point"—a giant room full of routers where hundreds of networks connect directly, swapping traffic efficiently and, crucially, for free.

Vodafone Germany is about to exit that public IXP based system.

By the end of 2025, Vodafone intends to have completely withdrawn from every public internet exchange in Germany, including DE-CIX Frankfurt, the largest internet exchange on the planet. Instead, all traffic will apparently flow through a single company called Inter.link (except for Hyperscalers apparently -> see the Update on the Heise article).

Vodafone says this move will deliver "lower latencies, more resilience, and cost savings." From my own experience Vodafone does have bandwidth problems currently, causing me to switch the primary WAN at my parents place to Telefonica, despite booked downlink capacity being 20x less on the Telefonica line. So: The question is wether this pans out. Will things get noticeably better or worse?

The open internet was supposed to work differently

When you pay for internet service, you're not buying access to some centralized "internet"—you're buying access to your ISP's network. That network then connects to thousands of other networks through a patchwork of agreements and connections. The magic happens at places like DE-CIX Frankfurt, where over 1,000 networks plug into the same switching fabric and exchange traffic directly.

This system is called "settlement-free peering," and it's one of the internet's foundational principles. No money changes hands. Networks exchange traffic roughly equally, everyone saves money on long-haul transit costs, and users get faster connections because data takes the shortest possible path.

When an ISP customer wants to download a large file from a cloud server somewhere on the WWW, chances are that traffic flows directly from the DC operators network to the ISP network at an internet exchange point—maybe four or five router hops, minimal latency, no intermediaries. It's elegant. It's efficient. And it's seemingly what Vodafone is abandoning by leaving public IXPs.

The new middleman

Instead of connecting directly to content providers at neutral exchange points, Vodafone is outsourcing all its interconnectivity to Inter.link, a Berlin-based company that operates Network as a Service platform. Inter.link operates more than 40 points of presence across 15 countries (info taken from their peering policy, while their network page claims a lot more, but I think that includes extensions) and claims connectivity to 300+ data centers in Europe.

The pitch is automation. Instead of managing thousands of individual peering relationships, Vodafone gets "one-click provisioning" and "single sign-on access." For Vodafone's network operations team, this is genuinely simpler. But here's the thing: operational efficiency for a telecom company and good service for customers are not the same thing.

Vodafone's official press release from November 2025 emphasized that the partnership with Inter.link would "reduce time, resources, and peering costs" while delivering "lower latencies" and "more resilience."

Settlement-free peering - for everyone?

Inter.link's public peering policy looks remarkably normal on paper. Updated September 1, 2024, it states the company is "open for settlement free peerings" and offers tiered arrangements similar to traditional internet exchanges: route server peering at IXPs with no traffic minimums, direct IXP peering above 1 Gbps, and Private Network Interconnects (PNIs) for networks exceeding 10 Gbps. The policy describes cross-connect cost-sharing but mentions no recurring charges, no per-Mbps fees, and no settlement payments between peering partners.

This mirrors how 99.5% of global peering relationships operate — networks pay for infrastructure access while exchanging traffic settlement-free with each other. The policy's technical requirements are actually quite sophisticated: mandatory IPv6 support, strict RPKI route validation, comprehensive BGP filtering, and modern 400GE backbone infrastructure. Nothing in the document reveals anything controversial.

Until you notice one critical sentence: "Inter.link does not peer with customers."

This to me appears to be the key to understanding the model. Here's what I take from it:

What we know for certain:

Inter.link offers settlement-free peering at public exchanges (stated in their policy)
They explicitly refuse to peer with their own "customers" (stated in their policy)
Vodafone is using Inter.link's commercial "FlexPeer" platform (confirmed in press releases)
Inter.link charges for various services including IP Transit and DDoS Protection (published on their website)

What I personally conclude: When Vodafone exits DE-CIX and routes all traffic through Inter.link, content providers might face a choice. They can establish settlement-free peering with Inter.link at public exchanges—but this doesn't guarantee quality delivery to Vodafone's network, since Vodafone is no longer there. One possible interpretation is that ensuring reliable access to Vodafone's customers might require becoming an Inter.link customer, though the exact commercial arrangements remain unclear without official confirmation.

A simplified example to illustrate the transformation:

Before (at DE-CIX Frankfurt):

Netflix connects to DE-CIX switch: €500/month port fee
Vodafone connects to DE-CIX switch: €500/month port fee
Traffic flows directly between them: €0 (settlement-free)
Total cost to deliver Netflix to Vodafone customers: €500/month

After (via Inter.link):

Netflix can peer with Inter.link at DE-CIX: €500/month port fee + €0 peering
But Vodafone isn't at DE-CIX anymore
For guaranteed delivery to Vodafone, Netflix likely needs to connect to inter.link as a customer: (unknown to me) commercial rates based on traffic volume / port size
Total cost: €500/month + Inter.link's commercial fees

Again, I might be wrong here, but this is to the best of my understanding.

The wikipedia article on Peering states: "The interconnection relationships between Autonomous Systems are of exactly two types:

Peering - Two networks exchange traffic between their users freely, and for mutual benefit.
Transit – One network pays another network for access to the Internet."

Given the statement from inter.link's public peering policy, you can see that this implies that content providers might have to pay for traffic if they connect to inter.link as customer.

Questions I have here are:

The platform is called FlexPeer... Peering is per definition settlement free. So does Vodafone peer with inter.link? Or do they buy transit?
Inter.link states, they do not peer with customers. Is Vodafone then considered a customer or maybe a "partner", cause peering by definition ought to be free?
What does FlexPeer mean for content-providers? Are they not peering when they become customers (in other words, are they getting a flat rate, or how does this work)? If not, is it correct to assume they are paying for traffic?

Deutsche Telekom - a blueprint for what might be coming?

Deutsche Telekom, another big German ISP, has been at the center of customer complaints about seemingly systematic service degradation for years. This has culminated in the project "netzbremse.de" (eng. Network Break).

You can look at the testimonials at https://netzbremse.de/#testimonials

Some network experts have suggested that congestion at interconnection points may sometimes result from capacity upgrade decisions, though the motivations and mechanisms behind such decisions remain disputed.

To be clear here: The jury is still out. Noone is convicted.

Does common logic support the claims?

Let's talk about that "lower latencies" promise, because it seems to defy basic networking principles.

Academic research measuring performance found that there seems to be a benefit of using ISPs latency-wise and hop-wise. The reason is simple: shorter paths should be faster than longer paths, given equal capacity.

Every additional network you traverse adds latency from routing decisions, queuing delays, and physical transmission time. Direct peering at an exchange point minimizes this. Routing through an intermediary by definition increases it.

I couldn't find any supporting measurements that would prove Vodafone's point of better latency.

Now, to be fair: Cloudflare CDN for websites also adds a hop technically, and that somehow works. So, the inter.link thing could have merit to it. In general Cloudflare is considered faster because of caching content near to you and optimised routes.

Tier 1, 2, 3

The internet networks are commonly categorized in 3 distinct tiers:

Tier 1: Networks that can reach the entire internet without paying for transit, maintaining settlement-free peering with all other Tier 1 networks.

Tier 2: Networks that combine settlement-free peering with some networks and purchased transit from others to reach the full internet.

Tier 3: Networks that purchase all their internet connectivity from upstream providers and typically don't peer.

Vodafone Germany was until now considered a Tier 2 network (while Deutsche Telekom is considered a Tier 1 network). Currently you can see a multi presence at German IXPs in PeeringDB. By moving behind inter.link's tech stack one could argue that Vodafone Germany now is to be considered a Tier 3 network... To me it looks like they are moving away from an open internet (where connectivity scales in a settlement free, open way), apparently choosing to have paid transit in some way or form. I come to this conclusion, since I don't think inter.link is providing connectivity for free. The question: If correct, who pays exactly, and who profits? Does this comply with net neutrality?

Whats interesting: According to PeeringDB (Vodafone entry | inter.link entry) Vodafone currently maintains ports with an advertised combined capacity of 1.2T (600G + 600G), while inter.link currently maintains 400G at DE-CIX Frankfurt. Combining all listed IXP capacity the Vodafone entry lists 2.71T, while inter.link lists 1.51T IXP capacity. Being present at an IXP does not mean one is simply accepting traffic from everyone, one would have to know the BGP routing for that. So the details here are unknown to me. Just from a pure numbers perspective, as of 11.10.2025 to me it looks like Vodafone currently has almost double the port speed for total IXP capacity, and triple the DE-CIX Frankfurt capacity available compared to inter.link.

Scaling port size should be rather quick though. I'd expect we see more IXP port capacity in December from inter.link. (Interesting side-fact DE-CIX has a cute little robot for port switching.)

A threat to the open internet?

" Lawrence Lessig and Robert W. McChesney argue that net neutrality ensures that the Internet remains a free and open technology, fostering democratic communication. Lessig and McChesney go on to argue that the monopolization of the Internet would stifle the diversity of independent news sources and the generation of innovative and novel web content." says the article on net neutrality on Wikipedia. Moving from a multi party peering network to just a transit setup, largely from a single vendor, if I understand things correctly, could be seen as "killing the open internet - one peering connection at a time".

So... Why?

One possible interpretation of this migration is that it could change the internet's economic model.

Vodafone's new architecture, as I understand it, could position Inter.link as the primary intermediary for accessing Vodafone's clients. I assume that having the best available access for Content Providers means having to join Inter.link as a customer. Golem however mentions, that private peering with hyperscalers will stay.

Professor Barbara van Schewick of Stanford Law School, whose work informed FCC net neutrality orders and EU guidelines, characterized similar practices by Deutsche Telekom as "a frontal attack on the open internet."

In August 2024 comments to European regulators, van Schewick explained that ISPs exploit their "termination monopoly" by charging "monopoly termination fees" to reach subscribers, and concluded that "paid interconnection fees violate the Open Internet Regulation's ban on discrimination and paid fast lanes."

In December 2024, Switzerland's telecommunications regulator delivered an 11-year ruling against Swisscom for similar practices. The Swiss ComCom decision found that ISPs have a "technical monopoly of access to their end customers" and that charging content providers for traffic delivery is "not permissible" because costs are already covered by customer subscriptions. The ruling explicitly rejected the 'double-dipping' model where both customers and content providers pay for internet access—a model that critics argue could emerge from arrangements like Vodafone's Inter.link partnership.

The Meta-Deutsche Telekom showdown sets the stage

The conflict reached a boiling point in September 2024 when Meta refused to pay Deutsche Telekom €20 million in court-ordered peering fees. Rather than comply, Meta rerouted all its traffic through third-party transit providers, completely severing its direct peering relationship with Deutsche Telekom. The German court had ruled that Deutsche Telekom could charge for peering, but Meta called this "putting the open Internet at risk and undermining net neutrality principles."

Regulators are paying attention (finally)

The April 2025 complaint against Deutsche Telekom came from a coalition including Germany's federal consumer organization (Verbraucherzentrale Bundesverband), Epicenter.works, Gesellschaft für Freiheitsrechte, and Stanford professor Barbara van Schewick. The complaint documents technical evidence of artificial bottlenecks and charges that Deutsche Telekom creates "paid fast lanes" prohibited under EU law.

BEREC (Body of European Regulators for Electronic Communications) released a report in December 2024 after a two-year investigation, identifying practices where ISPs "exploit bottlenecks at the entrance to its network to demand payments from online services" and classifying such practices as "potential violations of Europe's net neutrality law." The report listed "several examples, most of which involved Deutsche Telekom" [as cited in the complaint filing and CISPE's statement].

The Cloud Infrastructure Service Providers in Europe (CISPE) backed these findings in April 2025, noting that their members have faced "artificial network service quality degradation" in Germany since at least 2015, used as leverage for "additional unjustified payments."

The bigger picture

Vodafone's exit from public peering isn't an isolated technical decision—it's part of a broader pattern of large telecoms trying to reshape internet economics in their favor. Thomas King, CTO of DE-CIX Frankfurt, warned without naming companies directly: "We are currently observing a trend in which large market players are increasingly using their dominant position to monetize not only their Internet access business but also network interconnection."

The trend is particularly concentrated in Germany, where both major incumbent ISPs now seemingly operate restrictive paid peering models while competitors maintain more open policies. IT-Administrator, a leading German IT publication, warned that Vodafone's shift "could reduce transparency, while smaller providers and content providers may face higher entry barriers" and "could impair the diversity and openness of European Internet infrastructure." (One could make the counter claim here, that inter.link's platform actually makes access simpler for smaller players.)

If this model proves profitable for Vodafone and Deutsche Telekom, expect other European telecoms to follow.

The case for the inter.link deal

This post was posted on news.ycombinator.com and got a lot of comments there. As I mentioned in the disclaimer, there may be parts that I do not grasp entirely. I've had a few thoughts and learnings that may play in favour of the Vodafone/inter.link deal.

I get that routing and peering can be hard and cost intensive from a maintenance standpoint. Outsourcing that part for sure can be cheaper. And given that inter.link might really know what they are doing, one could say that improves quality.

Inter.link's business model bears interesting similarities to Cloudflare's approach. While Cloudflare mainly protects and accelerates individual websites and services, inter.link's focus is at the interconnect network infrastructure layer, sitting between ISPs and cloud providers rather than between service providers and end users. Still there are also similarities: Cloudflare even provides a specific routing service with their Argo product. This website uses Cloudflare, so I can understand the motives. If I understand correctly, Cloudflare could even be a potential customer of inter.link, if inter.link's backbone is especially efficient in getting data from Point A to B.

Given the name "FlexPeer" the ideal outcome would be, that it is going against bottlenecks and will actually improve the situation.

From inter.link's own material on their websites I take they are quite well connected to other networks. They also state to be a VPP for Google, same as Vodafone themselves apparently.

Google explains here how the VPP program came to be: https://www.youtube.com/watch?v=Yg-qV6Fktjw

From that perspective it makes sense to go the inter.link route. It seems to be a shift across the industry to go towards more private agreements.

To go more on the Pro side: inter.link seems to really do make complicated things simple: It could be that connecting to Vodafone becomes actually way simpler with straight up clear pricing even for smaller players in the industry.

In the end I think time will tell how things will pan out. In the meantime I'll try to get an interview with someone who can clear up some questions that arose on my side.