Every streaming platform since RealVideo in the mid 90s has had a way to detect bandwidth and send low bandwidth video based on the amount of bandwidth available. You can download a free streaming server right now from either Apple or Adobe that can do it.
"and then said "if you have this, we'll use it", the end result would be that everyone could benefit from an innovation of theirs."
Does he really need to provide a link to Apple's or Adobe's free offering or the $600 WireCast solution? I've set up an bandwidth adaptive streaming solution for around $2000 (Mac Mini + BlackMagic Intensity + camcorder).
"He's smart enough to know that favoring companies that "have the technology to do this" really means favoring large corporations, which is bad for the little guys."
This "technology" to stream lower bitrate video based on available bit rate has been around for 20 years.