I'm having significant difficulties with this paragraph:
"Comcast claims that Netflix was sending traffic at such high volumes as to intentionally congest the links between different transit ISPs and Comcast, essentially taking a page from Norton’s “peering playbook” and forcing Comcast and its peers (i.e., the transit providers, Cogent, Level 3, Tata, and others) to upgrade capacity one-by-one, before sending traffic down a different path, congesting that, and forcing an upgrade. Their position was that Netflix was sending more traffic through these transit providers than the transit providers could handle, and thus that Netflix or their transit providers should pay to connect to Comcast directly. Comcast also implies that certain transit providers such as Cogent are likely the source of congested paths, a claim that has been explored but not yet conclusively proved one way or the other, owing to the difficulty of locating these points of congestion (more on that in a future post)."
Now, peering negotiations are an ugly, unpleasant activity that I'm quite happy never to have been a part of. But I don't find this particular claim to be "reasonable and plausible", in the author's words. Where is the congestion?
* Inside Netflix? Nope.
* Between Netflix and their transit providers? Seems unlikely; Netflix is paying them, after all. Such congestion would effect many of Netflix's customers and be against Netflix's interests.
* In the transit providers? Possibly, but again, Netflix is paying them. Further, Netflix connecting directly to Comcast is the first thing Netflix would do, if the transit providers were trying to squeeze more money out of them.
* Between the transit providers and Comcast? That seems to me to be the most likely interpretation of that paragraph. But if Netflix is doing this intentionally; say, by directing 90% of their traffic to Comcast customers through Tata, those customers are most likely to be unhappy with Netflix, not Comcast---any traffic from a customer out that doesn't go through Tata is fine, so they wouldn't likely perceive any problems with anything but Netflix. Further, that seems to contradict the statement that "[customers] routinely experienced high latency to many Internet destinations every evening during 'prime time'". And if the congestion is not hitting one specific transit provider, then the idea that it is intentional on Netflix's part is silly and Comcast's peering relationships are simply inadequate for the traffic its customers are using.
* Inside Comcast? Well, I could see almost anyone wanting to have an unrelated third-party pay for their infrastructure upgrades, but....
Then, there's this: "The best technical solution (and what ultimately happened) is that Netflix and Comcast should interconnect directly." The best technical solution? The best technical solution? (Here's a hint: a fully-connected network is not a good technical solution.)
But the ultimate problem here is: "This is where market leverage comes into play: Because most consumers do not have choice in broadband Internet providers, Comcast arguably (and, empirically speaking, as well) has more market leverage: They can afford to ask Netflix to pay for that direct link—a common Internet business relationship called paid peering—because they have more market power."
Comcast has more market power because it is a monopoly and the problem with monopolies is precisely that they use their market power to squeeze money out of counter-parties.
As an aside, I find Feamster's comment reply, "What is false in Oliver’s presentation (and many of the claims in the popular press) is his claim about what causes* that slowdown. The cause of the slowdown is congestion, not intentional throttling,*" to be simply disingenuous. What exactly is the difference between intentional throttling and intentionally introducing congestion by not upgrading inadequate peering relationships?