This is an interesting challenge. The first problem is for many consumers there aren't able to access more than one actual high speed provider. This drastically reduces your position in any pricing negotiation. If someone were smart they could personalize their offer based on whether your personal house had options although I'm not aware of anyone actually going to that length yet.
The next challenge is that even in the face of competition simple economics can break down in the face of uncoordinated cooperation even without collusion . It may be superior for major providers to collectively increase the price even without literal coordination simply by a small number of providers acting legitimately on shared interests.
In theory someone with more than one option could ping pong between providers during sales that offer free installation but this is for obvious reasons undesirable insofar as internet is a vital service and switching can incur unacceptable costs and the more people actually do this the bigger the incentive to find a way to resolve this. For instance limiting such promotions to those who haven't had them before.
As a buyer I want this to resolve down to a simpler pricing model like T-Mobile even if its not as advantageous as initial pricing offered because I would like a predictable and sane price and for providers to compete on price/value but its likely that the current opaque and complicated pricing model will continue because its more advantageous for it to be complicated.
The biggest threat to this model is probably municipal broadband.