Stupid? I'm the only one here who seems to know what peering agreements are, and how they've worked for the past several decades.
There's no question Verizon has plenty of bandwidth. The problem here is Level-3 breaking their peering agreement, and not wanting to renegotiate, so Verizon has ever right to disconnect Level-3 and Netflix from their customers. Instead, they let the peering point get congested, until a new agreement is worked out.
It's how peering has always worked. You're the one arguing we need to erase the history of the internet, and turn it into a receiver-pays model, where every site you visit gets a few cents from Verizon.
The peering model is flawed. There are effectively four different entities in any given transaction:
ISP1 and Customer1 (aka consumer and ISP). ISP2 and customer 2 (aka service company). Eash customer pays their own ISP to get the bits to or from them to the border between ISPs. These customers have paid their ISP to do this regardless of the direction of the bits. I pay TWC and Verizon to move bits to and from my machines. Google and Netflix pay their providers to do the same. Companies like Level 3 should get paid to move bits from one ISP to another when the ISPs cannot reasonably connect directly to each other. They are paid by the ISPs to move bits from the ISP to the other ISP. As such, the ISPs should never be getting paid by anyone other than the consumer, and the tier 3 providers should not get paid by anyone other than the ISPs. In this regard, direct peering saves both ISPs money in direct proportion to the amount of their own customers traffic. In that regard, peering is always equitable and should be a cash neutral arrangement for everyone involved.
The only time the concept gets more complicated is if there needs to be a 5th party involved in moving bits from one ISP to another, and these parties should be paid by all ISPs, as they have no direct customers of their own. Where it starts getting stupid is when a customer has an arrangement directly with one of these 5th parties. Now everyone seems to think they are owed money by everyone else, when in reality, once the 5th party starts providing internet service directly to the customer, they effectively become either ISP1 or ISP2, and all payments to or from other ISPs should stop. Allowing any other arrangement is idiotic, and will lead only to the kinds of dimwitted inbred redneck fighting we have now. If a tier 3 provider really wants to go into the ISP business, then they should keep that business as a separate entity at arms length. otherwise ISP1 would be fully justified in claiming that it the 5th entity is really ISP2, and as such demanding that the arrangement is a peering one, and not a transit arrangement.
In the end these stupid fights hurt only the consumers and the Internet in general. A tier 3 provider can usually be bypassed pretty automatically, but for end consumers bypassing their own ISP is far more difficult, as many have defacto monopolies in large areas of the country. In the end, Netflix is trying to alleviate the problem by providing content delivery from the ISPs own local blockhouse, thus saving everyone the bandwidth, but when an idiot like Verizon thinks that they are somehow entitled to be paid for allowing someone to save them money, they need to get smacked around.