Originally Posted by jhughy2010
I've never heard of direct peering (haven't followed this thread in its entirety) can someone explain?
Think of it as Netflix being a direct customer with the ISPs to which it has "direct peering" agreements.
Netflix tried using "OpenConnect", which is having a Netflix server(s) ("OpenConnect Appliance(s)") on the premises of the ISP and requests for streams go to that server(s). Where geography makes servers in different locations advantageous by not overloading that ISP's backbone, there may be servers in multiple locations. This seems more popular in Europe than in the United States, though some ISPs in the United States have gone this route.
In the United States, several ISPs (e.g., Comcast, Time Warner Cable, Verizon) have a "direct connect" agreement with Netflix, meaning that Netflix servers on Netflix premises are connected to the ISP like a regular business customer, potentially at multiple locations. So, in my case, when I want to stream a Netflix movie, the data flow is from a Netflix server to Comcast (since Netflix is now a Comcast customer and that Netflix server is connected to Comcast) and then to my home (since I am a Comcast customer renting one of their modems) and to my TV. And, likewise, a TWC subscriber would get streaming data from a Netflix server directly connected to the TWC network (since Netflix is also a TWC customer).
Without either "OpenConnect" (Netflix server at that ISP's location) or "Direct Connect" (the Netflix server wired to the ISP), a third party interconnect is often involved between the party where streaming content is hosted and the ISP of the end customer. Many of the slowdowns were caused by larger ISPs declining to improve capacity to the intermediate party at the interconnect points because several intermediate parties declined to pay more for the amount of data they are sending to the end user's ISP that exceeds the amount of data going the other way. (Most mutual peering agreements assume roughly same amount of data going both ways at the exchange points, whereas services like Netflix and YouTube tend to drive the majority of the data to the end user.) Now some third parties do pay the ISPs when they send more data to the ISP than they receive, but in turn those third parties charge more to their customers. Rather than pay more to the third parties that would then pay the ISPs more, Netflix went the way of directly negotiating a direct connect to those ISPs and thus become customers of those ISPs.