On the other hand, I disagree that some things the major ISPs have done is a simple result of lack of competition. Of course, the ISP market is in bed with the government. Of course, they get away with things they probably wouldn't in a less monopolistic market.
On the other hand, if the market were more open, who's to say favoring content or metered billing or whatever wouldn't emerge as optimal strategies. There are "private content network" companies out there who do precisely that - favor content on their networks - and the idea does not strike me as an inherently bad one.
Look at the problem posed by Netflix. They are a key driver in many of these discussions, because the bandwidth consumed by their online video services almost certainly is more costly than what they actually pay (and hence they can get away with charging customers far less than the cost of delivery). Yet, the government says ISPs can't "discriminate" against Netflix traffic by charging Netflix higher rates. What will end up happening is that the ISPs will just charge all of their users higher prices to make up for the bandwidth Netflix is using (see here for a good discussion: http://seekingalpha.com/article/238107-netflix-now-we-re-coo...)
Is that really the best solution? What if users had the ability to access an ISP who solely provided Netflix content and perhaps a few other services, and blocked traffic for anything else? In that case, they might pay for a basic internet subscription, and then some amount more for access to the private network. At least in that case, only the users who want access to Netflix content would pay more for it. I am sure the commenters here could think of many other problems with that business model, but it would be better than having everyone pay higher rates so that high bandwidth users can avoid "discrimination."