Netflix v. Comcast - 2010
"Peering" as we know it was always held to be where two organizations with data pipes that were roughly equivalent in size and depth (ie, data rate and actual usage/capacity) would exchange packets for free.
In December 2010 Netflix switched from the Akamai content delivery service to the Level 3 ("L3") content delivery service. A content delivery service takes a customers data and makes copies of it all over the country on their own servers so when, for example, a Netflix customer asks for a movie, it's not delivered from Netflix in California, it actually comes from the closest server owned by the content delivery service. This saves those expensive long haul transmissions of data.
When Netflix switched from Akamai to L3, comcast said to L3 "oh, no, we're not peering any more, the amount of data you give us is 5X the amount of data we send you. We're not peers, you have to pay" and promptly cut L3's Netflix traffic off; Comcast customers could no longer reach Netflix and Netflix' ability to extract its $8/mo from Comcast customers was impeded. The sensible thing would have been for Comcast customers to cancel their accounts and "get a real ISP" but that didn't happen, instead, Netflix blinked and now pays Comcast. This is wrong, and demonstrates the fault with peering arrangements as they exist today.
The net relies on peering and if you say "sprint" and, say "MCI" (back when they existed) then it'd be fairly clear to even a lay person what it meant and entailed, 10 or 15 years ago. Sprint is an ISP that has a bunch of traffic from its customers, so is MCI, they exchange data for free so all their customers can reach each others customers.
And in a sense it served the customers of each, as there was a random mix of content providers (although not that many though really) and data consumers.
Pre-web this meant really everybody sends and receives email (and to a lessor extent Usenet, FTP, IRC, etc) and the contents of say, Sprint's pipes looked an awful lot like the content of MCI's pipes.
The adoption of the web didn't change that too terribly much. ISP's hosted websites for people and customers of all ISP's were pretty much created equal. ISP's had customers, they bought one (or more) connections from the long haul telco data pipe people, the Sprint's and mci's of this world, and those guys all peered. The system worked.
Back then there were very few huge pervasive websites that everybody used. I remember Jim Clark, the CEO of Netscape back in the early days complaining how much they had to pay for an INTERNET connection so they could give away their product.
While eBay and Paypal were big deals even ten years ago it took Google, which EVERYBODY used, seemingly overnight, to tip the balance and recall that their insistence that they not have to pay, cause, who wouldn't want to carry Google - everybody wanted it, pissed off the long haul telcos who came back with "what if we carried some other search engine and if you want Google, you'd pay extra" and suddenly the fight for net neutrality was on. Very few people understand this was the origin of the net neutrality argument. So, fast forward to today and we have an entirely new landscape. Google sensitized the telcos to this issue and Netflix has pushed them over the edge.
But, it's also important to recognize that the content of those long haul carrier data pipes aren't all people exchanging email any more.
So, if we are too look at the content of those pipes, sure we'd still see email being exchanged but L3 has no email traffic - they're not an ISP, they're a content provider, or rather a proxy for one, as a content delivery service and Comcast has no great amount of content, they're really just an isp.
So sure, the traffic maybe 5:1 (and I'm surprised it's that low) but when Comcast's customers are sending 100 byte packets that are HTTP requests saying effectively "send me gone with the wind" where the response is "ok, here's the 2 gigs that is that movie" then of course there's going to be a bandwidth inequity between peers such as L3 and Comcast.
Because really we have Comcast customers - consumers - on the one hand, consumers tied to an ISP like Comcast (or others) and we have content providers, like Akamai and L3 - that don't have consumers, that is, end used isp customers, on the other hand.
It seems a natural to me that a company representing poeple paying for content and a company being paid to deliver content would have it in their best interest to peer for free.
I'm appalled Netflix (or L3 or both I guess) blinked and is now paying Comcast. Where the hell Comcast gets off taking money from consumers and content providers is beyond me and really I suspect it's only because to many people Comcast is the only choice and they can't switch, that Comcast can get away with this. That and Netflix must be hurting for money. If it were me I'd have responded with "bugger Comcast. let their people starve, when they're fed up they'll pay US to peer, not have us pay them" and I suspect it's only that they're so dependent on that $8/mo from customers to keep going that they'll do anything to keep that going. They must have massive debt or a requirement they make profit no matter what.
Plus the whole idea of a Netflix is on the face of it rather odd. I the movie studios had been on the ball they'd have been buying up dark fibre around the country since day one, like Google did. Google doesn't make a big deal of it but they have one of the largest networks around.
So it wouldn't surprise me if that in the future the studios got together and put up a service the same as Netflix but that had al the movies, not some subset that are the films Netflix has licensed. And keep in mind Netflix in Canada has about a tenth of the films Netflix US does as negotiating Canadian IP rights is a whole new ball game.
And if and when the studios did this the Comcasts of this world will be staring down the end of a gun listening to the movie studio saying "ok, we have movies. this is what your customers want and this, Comcast, is what we're gonna charge you to have access to our content delivery network". Frankly if I were the movie studios I'd tell them to buy Netflix right now and partner with Google so they have access to their network and their content delivery and net neutrality issues get folded in with the Goog's.