[theandrewbailey]

Netflix pays a company to provide Internet infrastructure to them. (Level 3, I think) If your ISP isn't Level 3, they should not have the economic right to charge Netflix, because your ISP doesn't service them. Customers pay their ISP to deliver things customers want, no more, no less.

[rayiner]

Even if Netflix pays someone to get its data to Comcast's or AT&T's network, they benefit enormously from Comcast or AT&T getting that data to the consumer. In theory, both intermediate ISP's should have the right to charge both endpoints.

And in fact, that's how it has traditionally worked on the internet. Netflix would pay it's ISP, and the consumer would pay their ISP, and the ISP's would pay each other to account for any asymmetry in the data transfer between them (peering). These payments would ultimately be reflected in the charges billed to both endpoints, so the ultimate effect was that each intermediate ISP effective billed each endpoint of the connection.

This whole debacle arose because Netflix's ISP (Cogent) wasn't willing to adhere to the traditional peering arrangements. So in the end, Netflix ended up paying to connect directly to Comcast's network.