"That is correct, but you should be able to see that this is an unsustainable model. Let's say Netflix continues growing by leaps and bounds and absolutely dominates as the source of traffic on the Internet, even more so than it already does. L3 gets paid more and more by Netflix for their access bandwidth while Verizon gets absolutely nothing extra but is required to carry more and more load from L3."
The only reason that L3 would get paid more would be because Netflix was fully using their connection and getting their money's worth and needed to purchase additional bandwidth. Verizon would get paid more if either the number of customers increased OR their customers maxed out their bandwidth and needed faster connections. The reason Verizon would not get paid more is because Verizon is selling an oversubscribed service but likes to pretend that they are not.
So, what's really happening here is a mismatch between business models. When you buy a "business grade" Internet connection you pay more with the assumption that you are going to pump as much data down it 7x24 as you possibly can. You get what you contracted for.
When you purchase home internet connectivity, your price/bit/sec is considerably lower because it's on an oversubscribed network. However, the carrier will never say that, merely that your bandwidth isn't guaranteed. If you do try to use it 7x24 they'll try to find some way to wriggle out of the contract they made. And that's exactly what Verizon is doing here, by throttling the bandwidth from Netflix. Suppose all the traffic wasn't coming from Netflix. Would it make any difference? Not really, because as the L3 guy pointed out, the cost of the networknetwork hop is miniscule. Where it does cost is in the haul from the peering point to the house. So anything that increases the amount of traffic from the peering point to the house will cost Verizon money.
If someone were to come up with a peer-to-peer movie streaming service that ran entirely within Verizon's network but only on home connections they'd have a cow as well. What they really want is to be paid on a per-bit basis but that's not palatable in the consumer marketplace.