Some of us have worked on the ISP side of the house (disclosure: I worked for a small one that was crushed by Time Warner a long time ago) and view the Netflix debacle in a different light. Netflix has a history of trying to pass their costs onto third parties, by abusing settlement free peering, pushing their "Open Connect" devices on ISPs without offering to pay the usual co-location expenses, or trying to cheap out on envelopes that wound up jamming in sorting machines and causing USPS all manner of difficulties. That one turned into a major spat as I recall, with USPS having to threaten to revoke their bulk mailing/pre-sort price discounts before Netflix was willing to back down.
The long standing model for internet traffic has been sender pays. If you're dumping more traffic into my network than you take off my hands you pay me to get it closer to its destination. If you're taking more off my hands than I'm taking from you then I pay you. In the final example, we exchange roughly equal amounts of traffic and agree to do so without remuneration.
Is that model still valid today? It's hard to say. It did build the internet as we know it today, for better or worse. It would be easier for me to be sympathetic if this wasn't a pissing contest between Netflix and ISPs. The arrogance of Netflix is truly astounding, from my perspective as someone who worked in the ISP business, and I see it as billionaires arguing with other billionaires about who should foot the bill for their respective business models.
I'm confused. Netflix dumps their traffic onto the interwebs through some sort of ISP (paying them for the privledge), don't they? And when that ISP interconnects with my ISP they do the "sender pays" sfuff you talk about. Then my ISP gets it to me. How is Netflix doing something wrong here? Was their ISP not paying their internconnection bills?
I thought what happened was that Comcast acting as my ISP realized that they could throttle the Netflix traffic and extort money out of Netflix beyond what Netflix's ISP was already paying them to carry the traffic. That seems unjust. As a customer of this ISP, shouldn't I be able to decide what data I want to access, without the providers of that data needing to pay extra fees to reach me?