| By that logic, why consumers should pay anything to ISPs? ISPs don't have obligations to sign free peering agreements to CDNs or other large network owners, like Netflix, if it isn't advantageous to them. Large network owners agree to peer without charges when it is mutually beneficial. That usually boils down to whether the traffic exchanged between the two networks will be roughly balanced and managed reliably. One of the issue here is that Netflix doesn't operate an Internet backbone. Therefore, ISPs can't use Netflix's network to exchange traffic across the wider Internet. So this leaves the ISPs two choices here: 1) Agree to a free peering agreement with Netflix and build more capacity in their network at the ISP's expense to support Netflix's egress traffic;
2) Request Netflix to sign a paid peering agreement to support the construction and maintenance of the needed extra network capacity. ISPs who opt for the first choice believe that improving their access to Netflix will make their customers happy and thus allow them grow their business. The other ISPs who opt for the latter choice believe, on the other hands, don't see the free peering as an investment; they want rather to extract more money from their existing customers. So, it is not that surprising to see the incumbent ISPs, who have locked-in their users already and killed-off most of the competition, going against free peering. That said, I just can't wait to see Google Fiber kick the behinds of these greedy fools. |