* Stephen Sprunk
What it all comes down to is that the majority of eyeballs are on "residential" connections that are relatively expensive to provide but for which are sold at a relatively low price (often 1/10th as much per megabit of capacity). Those eyeball ISPs cannot or will not charge their customers the full cost of "receiving" traffic so they want money from the more profitable content ISPs "sending" the traffic to offset their losses.
Another point worth mentioning is that the traffic is going to flow between those two ISPs _anyway_. Therefore, in many cases the only ones to profit from them not reaching a peering agreement (settlement-free or not) is their upstream(s), who is probably delighted to be able to charge them both for the transit traffic. Regards, -- Tore Anderson