I seriously hope this crashes and burns. Various industries are trying to encourage this particular business model, and it's undoubtedly terrible for the consumer as it limits choice.
It's also worth wondering if ISPs could be accused of anti-competitive practices by encouraging 'product tying'.
I wonder if this could set up a new model for the Internet, one that would in some ways mirror cable TV. Most sites would still allow any ISP access since they don't have enough demand to have any bartering leverage with the ISPs (and even some that do like Amazon are interested in having as wide a base as possible). Sites like the NY Times, however, might be able to negotiate with the ISPs to license their content. This essentially gives them to ability to negotiate site membership at a much larger scale (and hopefully at a reduced per person rate). On the surface I agree that this does seem bad for consumer choice; however, if it meant the difference between having an NY Times and not having one, it could perhaps be argued otherwise. Of course, this model depends upon consumers having a choice of ISP in the first place.
If the ISPs become content providers, wouldn't they lose their status as common carriers. If they pay for ESPN's services wouldn't they become liable to the FCC for the content that they are paying for and possibly by extension the whole internet.
IANAL and I don't see an ISP losing its common carrier status over paying ESPN(It's too easy for them to buy the regulators.), but I can hope that something would stop this from occurring.
Not that I would advocate anything illegal, but couldn't someone set up a proxy from within an ISP that pays ESPN and open it up to those without access to ESPN.
The best way to attack this from the point of view of capitalism is to boycott their sponsors. That is remarkably effective. It can take famous personalities off the air, and much more.
Whining doesn't work. Hurting their pocketbook does.
It's also worth wondering if ISPs could be accused of anti-competitive practices by encouraging 'product tying'.