ISPs already do that on Settlement Free Peering (SFP) links. I've yet to come across an SFP agreement where they didn't have provisions about link upgrades when capacity is reached by BOTH sides.

What they don't have is provisions that say that if one side saturates an SFP link, the receiving side is obligated to upgrade to support that because that undermines the whole purpose of SFP.

If I have an SFP agreement with overage provision and I send twice as much traffic towards you as you towards me, I pay for the overage similar to a straight paid peering arrangement.

Paid peering congestion is purely contractual. If I pay for a 10gb peer connection with you and traffic from my network to yours saturates it, I pay for a higher bandwidth connection or accept the congestion.

No, Neftlix chose to stop using CDNs and instead put it's traffic on Cogent's network with the knowledge that it would arrive at Comcast and other ISPs via peer ports. When those ports saturated, and when Cogent started prioritizing other traffic, Netflix paid for transit directly on Comcast's network; which is something they should have done all along.

If my customersa are saturating the link, I have to pay to upgrade it. If YOUR customer(s) are saturating the link, you pay. In this, Cogent didn't want to pay despite the fact that its customer (Netflix) was saturating the link.

The internet was built on mutually beneficial peering agreements, not one ISP selling cheap transit to another and then expecting the recipient ISPs to tolerate huge traffic imbalances

Yeah, with all the stagnation and minimal innovation that arises in such a system.

Define inadequate peering.

I just can't wait for an internet where there are ISPs that only service large content provider/generators, and ISPs that only server residential/business customers.

The ISPs that service large content companies can charge low rates and make money because they have no overhead-they just have to connect to their customers at co-lo facilities. None of that pesky running fiber/coax to every customer's premises, no outlays for the various layers of their network.

They can rely on tools like you and other net neutrality supporters to lobby the FCC to lean on the residential/business ISPs (eyeball providers) to continually upgrade their connections to satisfy the incoming bandwidth requirements. This way, all customers of an ISP can pay for the extraordinary bandwidth demands of some, "content provider" ISPs can make tons of money, and companies like Netflix can stop having to pay for CDNs, server space in ISP datacenters, or any of the other things that the other content providers were doing. Everyone wins except for the residential and small business customers who now bear the full cost of the internal infrastructure, AND the ISP interconnects.

That's how the internet is supposed to work, right?

BTW, does anyone who actually understands networking really think that Netflix levels of traffic should be coming to large ISPs via peering ports?

How about you fuck off?

Cool, they can just live with fewer Uber drivers.

I've always noticed that the same thing happens with necessities. People empty the shelves and resell them at a premium without any news stories about how greedy they are. Bottled water, fuel, canned goods, ice, etc. are all resold at a premium by those who go to the store first.

If a store could raise prices, or "gouge" as you call it, they could afford to pay drivers and shippers from farther away to do special shipments and ensure that the shelves stay stocked. I'd prefer this to facing empty shelves because I forgot to pick something up, or the effects of the disaster lasts longer than my supplies and I get to the store too late

This.

What about all of the customers not downloading that data, should they also pay for these upgrades?

If I were a network operator and traffic from one of my peers from one specific source was saturating my connection, I would deprioritize that traffic.

Were the peering points congested in both directions, or just ingress to Comcast's network?

I agree, the companies providing transit to Netflix and other streaming providers should pay for the bandwidth being used by their customers.

Actually Netflix benefits by passing the costs to ALL Comcast customers and not just the ones who use their service.

If I were TW, I'd refuse too. Why do I have to allocate space in my datacenters for free for someone who is not a customer of mine?

I'm assuming Netflix doesn't buy transit from TW based on this:
http://bgp.he.net/AS2906

Now that Level 3 owns TW, this might change.