“So long as it’s legal” is an interesting caveat to universal service. Utility companies, e.g. electricity suppliers, don’t check whether you’re using the utility for illegal purposes. It seems like a true “utility” internet company would only take down content on receiving a court order.
It’s possible that a “choose to be utility or publisher” world would have an extremely polarised internet. On one hand, “utility” services with a lot of illegal content and the police playing whack-a-mole. On the other hand, “publisher” services with liability and therefore intensely risk averse, allowing only the most anaemic content.