I think it's fairly simple: in the original arrangement where ISPs provided access to content and that content was not video, ISPs were making out like bandits

I think it's fairly simple: in the original arrangement where ISPs provided access to content and that content was not video, ISPs were making out like bandits offering unlimited service at ridiculous speeds while not having to upgrade their own connections since customer demand was lower. Suddenly content comes along that increases customer demands on their "unlimited service" and instead of the ISP deciding correct the capacity imbalance (and accept that they "done screwed up"), they cry "unfair" and run to the courts. Back when peering agreements were in place it made sense for everyone involved; ISPs get great content they don't have to provide and/or pay for, content providers get access to customers. Now, however, ISPs are finding out that these agreements are very costly for them, they can't turn to their customers for more money due to competition and they can't just block Netflix because those same customers would leave for another ISP so they turn to the courts to repair their mistakes. If they win, Netflix gets screwed, the customer gets screwed and the ISP gets rewarded for their mistakes... that sounds like a heck of a public-private partnership. :)