The problem is that instead, Firm B could just follow the lead and also charge $1/month for Netflix, leaving the consumer with no choice. Or they could charge $

The problem is that instead, Firm B could just follow the lead and also charge $1/month for Netflix, leaving the consumer with no choice. Or they could charge $1/month for other streaming services and leave Netflix alone, so the consumer gets to choose between slow Netflix or slow Hulu & Amazon, with no chance to 'vote' with their wallets for fast everything. This is the danger of oligopolies - even when they don't collude, their interests are in not competing 'too hard' to gain customers. If there are two firms, and each has roughly half of the customers, then the most money Firm A could get with no competition is 2x what they already have, so getting into a price war could easily result in lower total profits. For example, if they have a 50% profit margin, then lowering consumer prices by 25% (and thus cutting profits to only 25% margin) only breaks even if they are able to sign up every customer of their competition. Free markets work best when there are many players and markets are easy to enter, as there is much more incentive to compete, which is not the structure of broadband markets.