The bilateral arrangement here is between the ISP and an internet backbone - in this case, likely Level3. Level3 has stated that they are willing to split the

The bilateral arrangement here is between the ISP and an internet backbone - in this case, likely Level3. Level3 has stated that they are willing to split the cost of upgrading the link. Verizon is unwilling to do so. It's also useful to note that the cost of upgrading a link is tiny in the terms of these companies - on the order of $10-20k[1]. Netflix already pays to have sufficient capacity at their end of the connection; it is the ISP's responsibility to do the same, since their customers are paying to access whatever internet content they want. It is unreasonable to expect Netflix to pay for a separate, unnecessary connection. That's more like if the Buffalo airport decided they were getting too many flights from LA, so if anyone else from LA wanted to fly to Buffalo, they would have to pay for the addition of their own private terminal. It's not the way things are normally done, and it doesn't make sense. [1] http://blog.level3.com/global-connectivity/observations-internet-middleman/#comment-41093 http://blog.level3.com/global-connectivity/observations-inte...