Gillis Cashman, a managing partner at MC Partners in Boston, says it makes sense to charge extra to big content providers like Netflix, whose services at peak hours can sometimes consume more than 30 percent of total Internet traffic. Video is "significantly congesting these networks, and causing real issues for carriers where they have to spend a lot of money upgrading networks, and pushing fiber deeper into their networks," he says. "There is currently no model for monetizing that required investment."
In essence, he claims it's a problem for the big ISPs to provide the service they're paid by their customers to provide. In markets where they're essentially monopolies or oligopolies. Despite the fact that Netflix and other large-bandwidth consumers have specific programs that significantly reduce long-haul bandwidth congestion and provide better service to the end user. These same big ISPs are crying poverty while collecting vast profits from favorable fees and ever-increasing broadband rates, yet they've refused to participate in solving these problems.
In fact, these same big ISPs also are intentionally causing congestion problems on their own networks to force the issue. Mark Taylor at Level 3 goes into much detail on this in his post last week. I urge you to read that post now, as he calls out six large ISPs, five in the U.S. and one in Europe, that are intentionally operating congested circuits to force capitulation from content providers. He declines to name the six but does note that "the companies with the congested peering interconnects also happen to rank dead last in customer satisfaction across all industries in the U.S. Not only dead last, but by a massive statistical margin of almost three standard deviations."
Naturally, there are two sides to this story. You can draw your own conclusions.