Why don't ISPs peer with everyone?

[bonomi at mail.r-bonomi.com (Robert Bonomi)]

> From nanog-bounces+bonomi=mail.r-bonomi.com at nanog.org  Mon Jun  6 17:20:16 2011
> Date: Mon, 06 Jun 2011 18:19:37 -0400
> To: nanog at nanog.org
> Subject: Why don't ISPs peer with everyone?
> From: rucasbrown at hushmail.com
>
> Hello,
>
> I wouldn't consider myself a network engineer, nor do I have any 
> formal training, but why don't ISPs peer with every other ISP? It 
> would only save EVERYONE money if they did this, no? Only issue I 
> see is with possibly hijacked / malicious AS owners, but that's not 
> very common to do without being caught.

The answer to _every_ question that  starts of "why don't they..." is
"money".

Who pays for the circuits to establish a 'peering connection' with an
ISP half-the world away?   How much does traffic does "Joes Bait Shop 
and ISP" in Painted Privvy, Nebraska have with a community ISP in 
Honshu, JP?"