Amusingly, AT&T and Verizon both made pretty much this same argument with Netflix. Their entire argument was that Netflix wanted them to upgrade their connections to Netflix and for the ISPs to pay the whole cost of doing so under a specious "peering" principle.
Kinda fully that the whole Net Neutrality issue has less to do with greedy ISPs than is does web service providers expecting a free ride.
Netflix was not getting "a free ride". They were already paying for a fast enough connection to the internet. The issue was that the interconnect between Netflix's ISP, and AT&T, was slower than Netflix's connection.
Think of it like this. Imagine you are a Youtube personality (and thus make money by posting videos). You're paying for a 60Mbps connection from AT&T. Google is also paying for a 60Mbps (keeping the numbers simple). You want to upload a video to Youtube, but its only going at 5Mbps, because thats the speed of the interface between AT&T East, and AT&T West. Should you have to pay AT&T an additional fee to upgrade their interface?
I say it is the network operator's job to upgrade their own hardware when it reaches capacity. With peering, both sides typically have to upgrade their hardware, so the expense is split between the two companies. It sucks that it costs so much money, but your responsibility is supposed to be to provide good service to your customers. The problem is, AT&T knows their customers can't go anywhere, so why bother?