@twl it's called peering. peering costs nothing if the traffic can go via those peers. there's usually a big fat switch room in a DC where everyone can just link to everyone over a direct layer 2 connection to avoid transit entirely.

plus economies of scale, it is vastly cheaper per gigabit of bandwidth on a port when you buy something like 100gb at once vs. 1gb. difference can be like 5c/mbit vs. 25c/mbit.