It's get the video stream via the Internet and pay exchange fees with other carriers, or private peer. It's why Akamai, Level3 and others were welcomed into telco data centers - it reduces their out-of-network costs. It was a smart and suitable solution of YouTube to deploy fiber and focus on private peering to major telcos/cable. It saved everyone a lot of money and provided a way to scale, without crushing the Internet. Hats off to them.
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Why telcos would want to private peer with YouTube
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