From that article:
Several Ars staffers have experience in maintaining peering and transit connections both in the US and Europe, and each agreed that the situation here is unusual. That's because most "transit" deals, the ones where money was exchanged, historically focused on data that was simply traversing one network on its way someplace else. Why should one network operator bear the costs of building and maintaining a network just so that some other network operator could route all of his traffic over it for free? Peering, or direct network interconnection, generally took place when each network sent similar amounts of traffic to the other and it wasn't worth the expense or hassle of trying to account for every bit.
But the CDN traffic from Level 3 isn't in "transit" anywhere; it's going to the Comcast customers who want to watch Netflix movies. Level 3 is, in one sense, doing Comcast a favor by making a key Internet service better; it's not simply taking advantage of Comcast's network to get its own traffic somewhere else. That's what Werbach means when he talks about a "terminating access monopoly"; Comcast has a lock on its customers and can try to extract rents from anyone trying to send them data, even if it's data they requested.
I spoke with Public Knowledge legal director Harold Feld, who makes the same points about peering and transit. “To the best of my knowledge,” he says, “this is the first time ever a last-mile network has demanded compensation from another ISP for delivering traffic requested by a subscriber on the ‘terminating’ ISP's network.”
Peering disputes have been around for years, and have sometimes resulted in slow Internet connections as one provider yanks its direct connection to another network, but Feld says that past disputes have "involved hand off of traffic through the middle-mile to transport it from one last-mile network to another.”
In particular, the cases where Level 3 shut out other networks for peering imbalances:
Level 3's choice to cry havoc and let slip the dogs of war is "simply duplicitous," Comcast says. "When another network provider tried to pass traffic onto Level 3 this way, Level 3 said this is not the way settlement-free peering works in the Internet world. When traffic is way out of balance, Level 3 said, it will assist on a commercially negotiated solution."
This is in reference to Level 3's own dispute over peering with Cogent, in which Level 3 eventually discontinued peering with Cogent's network after reviewing the relationship and concluding that too much traffic was coming from Cogent.
"Cogent was sending far more traffic to the Level 3 network than Level 3 was sending to Cogent's network," said Level 3 at the time. "It is important to keep in mind that traffic received by Level 3 in a peering relationship must be moved across Level 3's network at considerable expense. Simply put, this means that, without paying, Cogent was using far more of Level 3's network, far more of the time, than the reverse. Following our review, we decided that it was unfair for us to be subsidizing Cogent's business.”
But note that this was traffic in transit, not traffic that was requested by Level 3 subscribers.