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XBL does nothing to setup the network. All it does is enhance the network. PSN & XBL don't have dedicated servers, they both use whatever the dev sets up, p2p or the dedicated server the dev owns.

That's the issue. What the dev has setup MS is charging for. All Live is doing is enhancing matchmaking and easing ability to play with friends.

Let me repeat that - MS is charging you to use a Dev's server in some cases.