I'm unfamiliar with ISP scale networks - where is the actual bottleneck for them? One of the large ISPs in the UK is Virgin, and they have their own fibre network. They also throttle Youtube.
Is there only so much data that can go down a fibre line? Is it the routers (I'm not sure if calling them routers is correct?) that lie between the main backbone and the network connecting a street/apartment? Is it the hardware in a handful of large data-centers?
Usually it's the peering between google/youtube and the ISP that is the bottleneck, internal ISP network and google CDN are usually fine there's just an unwillingness to upgrade the connection between them (usually because parties can't agree on terms, some ISP would like to be paid when peering).
Traffic inside your network come free of cost of course except for your own bandwidth constraints, but once you need to communicate with other networks that's where you start to pay.
Google offers free interconnections, but sometimes you can't just connect directly to Google and have to go through backbones that are owned by private companies.
So ISPs need to create as many interconnections as possible with other networks to decrease their costs, invest in their own infrastructure and pay for everything their network can't reach directly.
Is there only so much data that can go down a fibre line? Is it the routers (I'm not sure if calling them routers is correct?) that lie between the main backbone and the network connecting a street/apartment? Is it the hardware in a handful of large data-centers?