Most of the argument is bullshit made up by people with an agenda. There's nothing sinister in Netfix paying Comcast for bandwidth. Something to think about while wandering in obscurity over how your bandwidth is paid for, if you were to start hosting data, would you suddenly get a free connection?
Netflix utilizes CDN's. A distributed network of infrastructure to pipe their content out without going all over creation. This is both to improve the quality of their service, and to appease the owners of the infrastructure they'd otherwise move data through. If they simply had a central location by which all video streamed, it wouldn't even work. The service would require the surrounding infrastructure to be increased by an order of magnitude or more just to avoid permanent disruption.
ISP's are sending information back and forth through the backbone infrastructure. They have mutual agreements with these backbone providers to send and receive information in kind, Level3 for instance does not pay Comcast for any overage they have in relative traffic, Comcast eats the shortfall. When you do something like watch a movie, you're recieving massive amounts of information, but they're sending out very little in return. It's a bad deal for them, supremely. If they can get paid to operate the CDN directly, they gain money on the data usage instead of losing it.
Your traffic is paid for twice, this is always the case. You pay to receive it, the host pays to send it. There's nothing actually unusual about Netflix paying an ISP to get their service to you. It's not all nice and neat, it's quite crooked of them to charge customers for bandwidth and then throttle it because they don't like the bandwidth being used, but the CDN system is necessary and rational. If two neighboring networks both have large quantities of Netflix usage, and one is being paid for a CDN while the other isn't, the one with the CDN is making far more money for far less traffic than the one without. They're also greatly increasing the load on any backbone infrastructure it travels through to get to that other network, increasing the cost and decreasing the reliability of connections through that system.
It's a simple matter of efficiency and margins. Netflix is just distributing their hosting closer to their users, they'd still have been paying for the bandwidth, they'd just be paying someone else. It's actually cheaper if they're not getting reamed by a greedy company taking them to the cleaners before they'll stop throttling it. You get better service, your ISP gets a more equal revenue stream irrespective of content, and Netflix gets increased reliability, and normally reduced cost as well when they reduce the scale of their architectural needs and thereby reduce the cost of procuring it. It's like buying a processor, you can get the bleeding edge, or you can pay half as much for ten percent less.
CDN's are the way of the future, unless you're just hosting some files on your personal computer, it's a massive benefit to pay a CDN operator to host your site in their distributed network if you have anything resembling high traffic. It might even cost you more than just having a direct host would depending on how small scale you are, but it's a better service that entails a substantially larger undertaking than just having a T3 to your server.
