Comment Re: Grade is on the curve (Score 1) 110
Each network pays for half of the costs of transferring the bits. The ISP charges its customers for its half. The data source pays part of its half to the customer's network because they do more than half the work.
Businesses like Netflix and YouTube necessarily emit large amounts of information from a small number of sources to a large number of destinations. This is always going to be much cheaper than delivering traffic to a very large number of destinations, like ISPs have to do. We assume the traffic benefits both networks evenly, so each side should pay half the costs. If not to the ISP, who should Netflix or YouTube pay the costs to? They don't bear them directly, because the traffic is necessarily much cheaper for them to carry than it is for the ISP.