I have experienced exactly this on Comcast. Suddenly, about two months ago, Netflix and Hulu became terrible to watch. I thought maybe it was my cable modem, so I upgraded it and still no luck. So I signed up for a VPN service and tested watching Netflix and Hulu both on the VPN and off. Sure enough, when on the VPN, I get the highest quality picture. When I disconnected the VPN, Netflix dropped down to about 500kbps…
An excellent test. If a VPN makes something faster, despite the fact that it adds overhead to the process , that seems like proof that it's being throttled.
The ISPs could just eat the cost, and let it be delivered for free. Or Netflix's CDNs could just pay the peering fee. Or Netflix could use different CDNs.
The reason the VPN works is because it sends the data over a different CDN that isn't saturated because of the dispute.
At least that is how I understand it, but I'm not an expert (or even a novice).