International Internet Connectivity

I would be extremely appreciative if someone could explain to me how US
ISPs and backbone operators address their international connectivity
requirements:

o How is their traffic routed?
o How do peering relationships work and where do they take place?
o Who pays whom for international transport(undersea cable and/or
satellite) and services?

In general those of us who aren't in the US pay to connect to those
of you who are. The efficacies, origins, and politics of this arrangement
normally, but not always, depend on which side of the pond you come
from. Traffic is normally routed as if one was a US customer with
a very long tail, though their are various peering points outside
the US (see Bill Manning's page at isi.edu) to attempt to keep
local traffic local. Peering is normally settlement free, just
like in the US. Also there are some continental transit backbones.
See http://www.ebone.net/ for example. The above is by no means
a full answer.