This situation has not been caused by an action of Netflix's, it has been caused by an inaction of the big ISPs. Interconnects are a boon to a distributed internet, and as Netflix points out in the post, ISPs routinely employ them - for free - in other situations. The main difference is that they typically can't extort the customers on the other end of the connection so easily; i.e. other ISPs and companies whose products don't visibly degrade when subjected to interconnect bottlenecks.
> This is flat out a lie, smaller services uses CDNs.
The reason Netflix is targeted here is not because they aren't using CDNs. It's because it's the first popular service that could easily be blackmailed in this way. The end result is that Netflix's cost have gone up in order to get access to the same 10Mbits/sec that their customer has already paid for. Those costs will be borne by Netflix (and its customers) and the ISP has effectively double-charged. Don't kid yourself by thinking the ISP won't turn that into a regular practice for any company that is successfully reaching its customers with a latency/bandwidth-sensitive service.
> This is flat out a lie, smaller services uses CDNs.
The reason Netflix is targeted here is not because they aren't using CDNs. It's because it's the first popular service that could easily be blackmailed in this way. The end result is that Netflix's cost have gone up in order to get access to the same 10Mbits/sec that their customer has already paid for. Those costs will be borne by Netflix (and its customers) and the ISP has effectively double-charged. Don't kid yourself by thinking the ISP won't turn that into a regular practice for any company that is successfully reaching its customers with a latency/bandwidth-sensitive service.