> I don't think the ISP's problem (opportunity) resides in the scenario you're describing. The problem is the top .0001% of Internet destinations congest the ISP generic network interconnects. Hence, these larger vendors (Netflix, Akamai, Cloudflare, Amazon, Google, Apple, etc) either pay the ISP for direct network peering or server hosting to sustain acceptable performance. However, this typically leaves the cost of growing internal network backbone capacity on the ISP. I believe the scenario you are describing would allow ISPs to offset this capital cost to both the big content providers and the biggest consumers.

I really don't understand what your point is ... how does avoding load on the internal backbone leave which costs of growing the backbone to the ISP?!

> The point about torrents and bitcoin is that these applications are particularly burdensome on routers because of the amount of connection requests as compared to a fairly manageable HTTP or RTSP session.

Uh? How is the number of connection requests relevant to a router?!

> As I mentioned above, server co-location and direct network peering is already a thing that many larger ISPs offer on a non-discriminatory basis.

Non-discriminatory is no enough, it has to be free or at cost. They are a monopoly, and as such non-discriminatory is still a monopolistic price.

> However, most new businesses will piggyback on existing cloud hosting (AWS/Google/Azure) or CDN (Akamai/Google/Cloudfront) arrangements.

Which isn't necessarily that bad, as long as there is competition among CDNs. A CDN ultimately is just a different kind of transit provider.