Imagine deciding to run a local ISP for 300 homes in your neighborhood. You don't know if all 300 will sign up for service. You don't know how long it will take to get to 300.
Do you pay for peering agreements that will meet the demands of 300 homes for the two years it will take to get there, or do you try to build up gradually? Will you be in a situation where you can't meet your existing customers' demand? Who will have leverage in that next peering agreement? It's clearly the entrenched backhaul provider.
If you have some ability to steer & prioritize traffic, you will have some wiggle room when it comes time to negotiate your next agreement. With net neutrality concepts- you lose that tool. You're totally dependent on the accuracy of your traffic predictions & the peering partner has a significant negotiating advantage.
You're going to take on the risk of digging trenches & negotiating peering agreements for underserved, rural or suburban locations. You're going to need a mass of homes to agree to the trenching & installation. You're going to have to negotiate labor for digging these trenches & laying cable in a way that will resist water damage & other threats.
All of this sucks and is hard.
>>the more you can pay the better service your company can offer which directly benefits larger entrenched companies, no?
I don't believe that anyone really wants to rate websites differently than they already are (via peering arrangements- which are how the Internet works, folks). But the argument that most people want to make is that ISPs will block access to example.com. The best example of access to a website being cut off I can point to is google's decision to block Amazon devices from accessing youtube.com.
If no ISP is doing this kind of blocking, then what's the point of exposing ISPs to risk of unfounded claims from random customers that you are violating net neutrality principals? Do you now need to absorb the cost of Audits to prove you're not? Digging trenches is hard, expensive & risky. What happens when you pile on more regulations?
Who is excited to get into this business? The established providers already have legal teams & are prepared to deal with legislators. Startup ISPs are annoying bugs that can easily be crushed with regulatory pressure. Add "ability to absorb regulatory & legal tangles" to your list of runway calculations.
All I see are increasingly challenging hurdles for startup ISPs that need pricing flexibility to manage the early, high risk tasks of starting an ISP.