You peer with your upstream ALT routers based on prefixes they are responsible for, and where the ALT routers are doesn't (necessarily) follow physical topology. For any prefix there will probably be more than one upstream ALT router. Yes, you announce your prefix to all upstream ALT routers responsible for the shorter including prefix. Table size should be minimal, depending on how things are configured in your neighborhood. It could just be default from each. At most it would be a set of highest-level prefixes, maybe some special ones, and some longer ones for local efficiency.
And your neighborhood really doesn't need back-doors so we can keep the ALT hierarchical by shaping it as an acyclic tree and not a mesh of trees or a mess of links connecting up and down at *different* hierarchical levels like the underlying Internet is configured today.
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