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If I am connecting directly to my neighbour next door who is using the same broadband provider, will my traffic go directly to him or will it go through the ISP?

Could you explain how this routing works?

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"Connecting directly to my neighbour"... What does this mean? You're connecting to Intenet through his router? – m0skit0 Feb 10 at 8:06
I assumed that it meant that his neighbor had some web server or something like that he was connected to, but I might be wrong – soandos Feb 10 at 9:11
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It will minimally go to some ISP's server, though it may not go to its central hub (there may be a closer substation that will reroute it).

Generally speaking, if you are running the traffic over wires that go to the ISP, there is no way for it to go directly to your neighbor. How far into your ISP your packets go depends on the ISP, and the way that they have the routing set up. There is nothing that you can do to control this.

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Most likely it will go through the first device in the line that can do IP routing. This is usually the first thing you see in a traceroute after your own router. – David Schwartz Feb 10 at 10:09
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For any node on the Internet, there are three critical pieces of information for routing: the IP address of the node, the subnet mask for that IP address, and the gateway router address. For instance, you might have the IP address 192.0.2.20, with the subnet mask 255.255.255.0. The subnet mask distinguishes between the network portion of your IP address and the host portion; another node with an IP address of 192.0.2.1 to 192.0.2.254 is on the same subnet. If the two nodes are on the same subnet, messages can be passed directly, or through the nearest network switch. If the two nodes are not on the same subnet, messages for the other node will be passed on to a router, by default the gateway router. The router will check whether the IP address is on any subnet for which it knows the route; if not, it will pass the message on to its gateway router, and so on.

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