Yesterday I visited the offices of RailTel - a public company in India that provides communication backbone to the Indian Railways, they had a very sophisticated setup of Optical Fiber cables for data transmission. They said that this is a private network for internal use only.

Then when I was in the Exchange Office - the main communication office, a place where they actually use those communication channels. They said that we could connect to the Intranet and as well as the Internet!

My question is, that how is this possible? How can privately laid optical fibers connect globally? On google, I picked up the term internet exhange? But this has got me confused further, why would a private network want to go to this exchange? Please explain me in very simple terms, how does this all work? If this is just a connection of wires, then why charge so much for little bandwidth?

Thanks.