They use a form of deep packet inspection to identify and "manage" traffic on their network. Where it sits doesn't matter.
HN user
vzwthrow
Throwaway here, so take it for what it's worth but I swear my experiences are true.
I deal with Verizon Wireless (as far as I can tell, the article is about the other Verizon entity) reps often, I've heard this mentioned many times in an almost off-handed, positive, revenue-generating manner.
That they're positioning themselves to charge providers like Netflix for "priority" on their network. Except the way they describe it, it sounds like they will be deprioritizing or otherwise "shitifying", for lack of a better word, the provider's traffic. Netflix was specifically mentioned.
It's never mentioned on internal slides, but there's always some vague term on a slide that brings up this topic.
This is going to happen, people, unless legislation interferes with their plan and even then they may be able to loophole it. Net neutrality is the enemy, as far as Verizon (and possibly the other big telcos) are concerned.