If ISPs actually blocked content consumers wanted, consumers would go elsewhere. They have increasing choices of Internet access. But ISPs must manage their networks so that the experiences customers want get delivered as expected.
If as a consumer I use Vongo and I'm trying to download twenty 1GB movies at the same time over even a 16 MBps broadband service, but there's one of those twenty I want to watch right away, unless there's some way that movie's download gets handled ahead of the rest, I'm going to be frustrated.
If I'm a start-up operating a web application that augments a prime time TV show and my business model depends on reaching millions of people at the specific moment that TV show starts, and 99 or 999 or 9,999 other web applications are also trying to appear to similar people at the same time, if there aren't some rules in existence for which applications get seen and with what quality, I'm not only going to be frustrated -- I might be out of business.
Peer-to-peer computing of any type, including Bit Torrent who are today's cause celebre, represents special challenges. Because unbeknownst to specific Web users, their computers could be invoked in uploading or downloading activities. Completely unintentionally, these could negatively affect performance of their own or even other people's apps. I'm not sure that most people who have subscribed to Bit Torrent type of services want them to function to the detriment of other web activity.
So the only way any ISP can hope to satisfy consumers and web app providers is to implement rules to address the natural, and clearly growing, oversubscription of the ISP's assets and capabilities. Consumers and web app providers who aren't satisfied with how those rules get applied should have the ability to go to ISPs and pay to broaden the pipes. Presumably, since there is substantial competition in the ISP segment, if any one ISP isn't willing to broaden its pipes at a price deemed fair by the requestors, those folks can give their money to that ISP's competitors.
I think that's known as capitalism. It seems absurd to me that much of the squawking about this issue comes from Silicon Valley types who have pocketed boatloads of cash thanks to similar free market capitalism. Similarly, I can't understand how an FCC Chairman supposedly in favor of competition and protecting consumers, can view any ISP's efforts to follow standard network management practices as inappropriate, unless he is consciously seeking to create advantage for that ISP's competitors.