If Netflix is paying Level3 enough to send the data to users, but Verizon is not paying Level3 enough to get the data on behalf of their users then it sounds like Verizon's fault.
Peering agreements should be about saving costs on both sides, but if Netflix is willing to pay Level3 for sufficient bandwidth then Verizon should have the ability to handle that for their users.
Verizon doesn't pay Level3 for the traffic, the person sending the traffic always pays, unless there is a peering agreement.
That's how it's always worked. These fights and skirmishes over peering agreements happen often. That's the reality of how things have always been up until today, it's not a change in the status quo.
Peering agreements should be about saving costs on both sides, but if Netflix is willing to pay Level3 for sufficient bandwidth then Verizon should have the ability to handle that for their users.