If Netflix were to make their users' devices upload as much data as they download (even junk data which would be discarded at by their edge routers), would they solve the problem of the in/out data imbalance, and thereby be able to take advantage of free peering (with no bandwidth cap) with Comcast?
I suspect this wouldn't be the case, and the outcome would still be about their bargaining position and the negotiation process.
Can anyone with knowledge of these types of negotiations comment?
Well, that would be cheating, and Comcast would refuse to be cheated. But let's talk of a hypothetical P2pflix that is a video service with almost balanced up/down packets generated by end users.
For p2pflix, such negotiations would be far easier. The reason is that Comcast would need to somehow send those packets into p2pdflix network (they can't flat out refuse to deliver them in a net neutrality environment, or people would complain that the Internet is broken) so the alternative would be to pay a carrier that then peers with p2pflix. So instead of both paying their carriers, they might come into an agreement to do a free peering.
Peering is exactly that: when network A realizes that it's paying carrier C1 too much for traffic going into network B, they call B on the phone and ask for a free peering; network B checks how much they're paying carrier C2 to bring traffic into network A, and afterwards agrees to peer for a certain amount (e.g.: 4Gbps). They choose a data center where they both have a presence, setup a router with 4Gbps routing power, and reconfigure their BGP routes. Done, and the bills with their respective carriers go down, and everybody is happy.
If there is some disproportion, a paid peering might be negotiated; one of the two network would still be paying, but stil a lot less. Say network A is sending 4Gbps into network B, and network B is sending 6Gbps into network A. They can either free peer for 4Gbps (plus B would balance the extra 2Gbps through a carrier to reach A), or B might agree to pay directly A to have up to 6Gbps of peering, paying only the extra 2Gbps. Even assuming that the price per gig is the same of the carrier (and it's usually lower), it's still a good deal for both parts.
The problems happen with YouTube and Netflix because they don't have this negotiation power with ISPs, because they have a very big monodirectional flow of traffic. Let's also remember that on top of being monodirectional, the absolute amount of traffic is staggering: together, they make something like 45% of the TOTAL US TRAFFIC.
Netflix says that Comcast is letting their peering with Cogent saturate, and that's probably true, but I wouldn't be surprised if Comcast measured that 90% of that peering is being used for Netflix traffic. Otherwise, they wouldn't let it saturate because not only they would disrupt Netflix traffic for their users, but also any other website traffic that happens to be delivered through Cogent. (Well actually I guess Comcast doesn't really care that much about their quality of service to end users, but you get my point).
To me, it's not a clear cut. Obviously Netflix is a good and nice company providing a disrupting service we all love, and Comcast is a big bad ISP with monopolistic control on access in most zones and doing big profits with shitty service. So well, it's kind of easy to side, but I wouldn't say that Comcast's requests of being paid directly by Netflix is totally unreasonable, given the way the Internet has always worked up until now.
I suspect this wouldn't be the case, and the outcome would still be about their bargaining position and the negotiation process.
Can anyone with knowledge of these types of negotiations comment?