By Big Telco I imagine they refer to ring companies like T-Mobile Vodafone. My understanding is that they are already paid by the end user [0] but want to be paid more for the incoming (video) traffic.
Cloudfpare claims that in the EU there are mostly two ways for them and Netflix to reach a user
1. Connect to a big exchange where every Telco is connected
2. Directly peer with the Telco at much higher prices
The thing I do not understand is why do Telcos accept lower prices from the exchange.
Is connectivity sold auction-, style? Could t-mobile decide to charge double [1] for use of its infrastructure?
Whatever it happening it is unclear to me why they happen to accept lower prices from one entry point and not another. Are these connections materially different?
[0] end user is well defined in the case of someone whatching Netflix.
[1] by net neutrality they cannot charge Netflix more, but they can charge everyone more.
For reference the top 10 by Internet exchange point participation are:
ASN Name IXes
AS6939 Hurricane Electric LLC 290
AS13335 Cloudflare, Inc. 287
AS42 WoodyNet, Inc. 251
AS3856 Packet Clearing House, Inc. 250
AS15169 Google LLC 221
AS20940 Akamai International B.V. 202
AS8075 Microsoft Corporation 195
AS32934 Facebook, Inc. 184
AS16509 Amazon.com, Inc. 149
AS54113 Fastly, Inc. 125
Though I don't think this reflects the rank of overall importance to settlement-free transit, since a single settlement-free agreement with AT&T or Deutsche Telekom or China Telecom, etc., would be worth more then hundreds of agreements with smaller regional players.
Probably the importance of IXPs also follow a power-law distribution, with the top 100 exchanges combined seeing more traffic then the next 1000 combined.
Its more like telcos want to be paid from both ends for the same data. They want subscriptions from their customers every month and then want tech companies to pay to send data.