Technology

That's not how billing works on the internet: You hook up to an IXP for a flat rate depending on the port bandwidth you want, then make peering agreements with other people there. If traffic levels are about even, say, a regional ISP with a neigbouring regional ISP, they will just deal with traffic directed at each other for free.

But that only connects you to the next ISP, not to the whole internet, to get at the whole internet you peer with a tier-1 provider, people who run connections to IXPs all over the world so you can reach all. They're going to want money for that, and they're going to bill by maximum upstream bandwidth you sent out to the internet you used in that month^1^.

If you're an ISP that's generally fine, you're getting money from your customers, if you're a company with a webserver that's also fine, bandwidth isn't that expensive. If you're someone who puts petabytes on the pipes though, that includes the likes of netflix, you want to do something different: You want a box at every IXP that caches content so you can peer with those regional ISPs directly. That's also generally for free because while you're sending a lot of data, hooking up directly to you means that the ISP won't have to pay their tier-1 provider for the upstream part of the connection (there's always ack packages etc) and it's not like the total amount of traffic they're dealing with increases, it only shifts. Historically that has been akamai, the original peering slut (peers with everyone as long as they're sober), now there's a gazillion of CDNs and content providers like netflix which run their own CDNs.

The only ones complaining about that are tier1 providers which are also ISPs because they'd rather have all those CDNs pay them for using their fibre than not use their fibre and make things more efficient. They're rent seeking. And ISPs who want to triple-dip and have you pay by volume, which noone on the internet pays for.

Oh: What you pay your ISP for is a line and share of a port to the IXP, its maintenance, and your share in what they're shelling out to their tier-1 provider(s) for the stuff you upload into the wider net. Which is btw why asymmetric connections (higher download than upload bandwidth) make sense even if the underlying connection is symmetric: Provided the ISP's infrastructure is fast enough receiving more packets over their line only costs electricity, and a negligible amount thereof.

^1^ It's not "maximum" but "modulo 1% spike or something" don't ask me about the exact maths