said by devnuller:So unless you peer with me, I will selectively block your customers. Interesting NEW Internet model.
Blocking is the wrong way to look at it.
It's similar to the media companies that take down channels during negotiations to get you call up your cable / satellite company to threaten to cancel. The play is always to hold the downstream subscriber hostage to get the multichannel operator to make a deal they otherwise would be incredibly hesitant to make.
In this case, Netflix is using a carrot instead of the stick. Hey -- call up your ISP and ask them why they aren't on OpenConnect so you can get this SUPER COOL FANCY HD! It's completely free, and it even has "Open" right there in the name so you know it's a good community thing like opensource software.
Peering is all about connections between network operators that allow the downstream customers of each respective network to connect. Carriers like Cogent have to operate a large network with many downstream customers to gather up all that traffic to transmit to customers of Comcast/TimeWarner/etc. The equation tends to self-balance because the scale of operating such a large infrastructure limits how much you're going to exchange.
This, of course, all goes sideways when you talk about massive content engines as part of a CDN. Compared to operating a vast network, to stand up a CDN at major carrier neutral facilities is pennies to $20 bills. Servers are cheap, 10gig server interfaces are cheap, and LAN switches to transport bits within a single building are ridiculously cheap.
Comcast got into this spat a couple years ago with Level(3) when they wanted to dump an extra 100+Gbps into Comcast's network as part of their existing SFI agreement. This approach appears to be even worse for ISPs. Not only do they tie up ports at their major peering locations to a single upstream source (Netflix), but for their trouble Netflix will dump
more bits onto their network than if they hadn't connected up in the first place.
I want you to let me use your car for free; as a bonus I'll always return it with the tank empty. For your trouble, however, I'll give all your friends rides and tell them what a great guy you are. Clearly you come out on the winning end of this arrangement.