I don't have a dog in this fight yet because now that it has become political I really haven't taken a stance one way or the other considering my limited knowledge of laws that relate to net neutrality among other things. That said, I'm trying to understand what you're saying here. Are you saying that a provider holds a legal right to charge more to a service like Netflix based on the bulk of traffic they bring as the law currently stands? Trust me, I've read all these posts but I'm still confused as to why people are upset that Comcast would charge a big company with a heavy load of traffic more money for bandwidth speeds. It seemed plausible to me when I first started reading about this with the Verizon/Netflix thing.
Yes, that is what I am saying.
Something similar like this exists for voice calls. This is not a perfect parallel, but it might help. Think of standard long distance phone calls:
You have a local telephone company. You also have a long distance company. It used to be those two things were the same. AT&T was both the local and long distance company. They built and owned all the phones and the copper connecting to them everywhere. They were a complete monopoly end to end. MCI was the first company to compete with AT&T. They built out an alternate path for long distance voice call. They build out a network of microwave links across the US. A customer could now choose a competing company when they picked up the phone to make a call that left the local market.
That is great for long distance. All well and good, but MCI could not actually ring the phone in a house. They *still* had to use AT&T at the local level to complete the call. MCI had to pay AT&T to complete the call. This type of billing still exists today. Even AT&T has to pay other companies for calls to complete since they do not own every phone network within the US anymore.
This is the position that Netflix is in. Netflix does not run a wire to each customer's house. They have to use another network to send their video. Since they are not delivering the packet personally, they must pay that network to deliver their packets.
Note that this arrangement is only for peering connections, not transit.
Netflix only had to pay "extra" when they are directly connecting to another network. They could choose to buy raw bandwidth just like you do for their video service. Think of transit like your Internet service. You connect to it and you get to browse the web. You have no choice how you packets route through the Internet. If you go to a web site that has bandwidth issues, then the site might load slow. You are not able to run a wire directly to that web site and get faster downloads.
The problem is that raw bandwidth can be costly. Not only that, but Netflix might be sending their traffic over congested routers they have no control over. Netflix is sending a lot of data. They need to make sure that every point along the path their video takes is fast. To have this level of control, they have to run their own network and peer directly. They pay for each peering connection separately.
Complete control... a huge win for Netflix.
The other win is that peering can save a company a lot of money on transit costs. Peering costs less because you are asking a network to deliver your packet directly. One network to another network. They don't have to turn around and hand off your packet to yet another network. If you were asking for a network to deliver a packet *outside* of their network, then it would be called a transit connection and they would charge more for that.
If this sounds complicated. It can be! There are buildings called "carrier hotels" that have "meet me rooms" where all the networks can easily connect to other networks for peering and transit.
Search for images of "One Wilshire meet me room" so see how crazy the wiring can get.