The issue is really that the idea of transit providers in general are becoming obsolete. So much fiber was laid, with DWDM and further subdivision abilities, it costs comparatively nothing to get a nationwide network these days. That was Cogent's entire business model, buy cheap fiber, sell transit for almost nothing to content providers, practically (in some cases, actually) give away transit to ISPs/businesses to keep their traffic ratios as balanced as possible.

Now, we're in a situation where it's not technically or financially hard to have a presence in every regional peering point. The major content providers don't need transit providers (or in the case of Level3's CDN, are already provider) except out of convenience and their access to settlement free peering. The major ISPs have no need for transit providers(or are already providers), as all the content providers wants to peer with them, and most of them have nationwide networks to do so. (see comcast: http://business.comcast.com/images/default-source/about-us/t... )

Unregulated peering has lead to the cost of transit plummeting to almost nothing. ( http://drpeering.net/white-papers/Internet-Transit-Pricing-H... ) We've just hit an interesting point where 2 contentproviders (Netflix and Youtube) are half of all internet traffic, and the eyeball networks are all basically tier 1 transit providers. There's basically unlimited choice for transit providers for ContentProviders, but each eyeball only has 1-3 ISPs to choose from.

My thoughts are rather than attempting to regulate transit/peering, regulate that last mile network and let people choose their own transit provider. Back in the DSL days, I used a local ISP that provided cheaper/better service than our telco. If I could pay a flat $x/mo for 1gb connection to a transit provider of my choice, I'm sure Google or Level3 would offer cheap uncongested access.

Is there a relevant difference between that and what Netflix wanted?