They're not necessarily doing this "for free", but as a part of the service their customers have already bought and paid for. It's not doing anything extra, it's normal operations, it's keeping the promise the business made to the customer, which is the opposite of what Verizon is doing in this case.
"Thus, class-action waivers must be enforced regardless of the consequences for the vindication of small-value claims, state or federal."
also, http://www.cbs46.com/story/24388303/consumer-advocates-fine-...
also http://publicjustice.net/content/tribe-scotus-denying-access...
also http://www.minnpost.com/community-voices/2014/05/forced-arbi...
So any disputes with verizon cannot go to court, they have to be arbitrated. Further, there cannot be a class arbitration. So to vindicate your rights against verizon, you'd have to be willing to bring an individual arbitration against Verizon and bear the costs of doing so which will be exponentially more than the value of your claim. In essence, these clauses immunize corporations from liability under antitrust laws, consumer protection laws; employment laws etc. It is a terrible situation created by a Supreme Court that despises class actions.
This is the increasingly common case of an ISP wanting to have it's cake and eat it too. It's an analogy of course, but it's a good one.
Verizon has either a monopoly or a near monopoly on the last mile from POPs to it's customers. In other words customers have no choice or little choice but Verizon.
And these customers pay Verizon for some amount of bandwidth and expect Verizon to make a good faith effort to deliver that bandwidth. The Terms & Conditions always say "up to X Mbps" because Verizon can't control network congestion once the data is off of Verizon's network. It might be that once the data leaves their network it has to go to Australia which has notoriously poor internet as a result of being kind-of out of the way. Or maybe it heads to Africa and starts making cell tower hops in which case it's going to be abysmal.
But in this case Verizon isn't making a good-faith effort to deliver the bandwidth that their customers are paying for to them. What they want is to extract extra money from someone who also provides a service to their customers, namely Netflix or Level3. Why do they want to do this? It's hard to say for sure. Trying to make extra profits, trying to keep Netflix slow and encourage people to subscribe to Verizon cable TV, spite? We can't know.
But what is clear is that this isn't the fault of Netflix or Level3. Level3 has said they will upgrade their side of the connection for free which would reduce congestion and Netflix has offered to locate servers on the Verizon network for free, which would reduce the Verizon/Level3 network congestion.
But Verizon refuses to accept either of those offers. Why? I'll venture a guess: it's not because they have the best interests of their customers in mind. If they did, they would have upgraded already.
To me it seems like they're abusing monopoly(ish) power.