Free market = regulations
For any market to function all participants has to make informed choices, otherwise competition simply will not work. This is why a functioning free market needs to be well regulated. The downside of regulation is that in impedes on freedom of choice. Thus the more professional a participant can be said to be, the less protection the regulation has to offer. Consumers are not however, and needs simple well established regulations that lets them make informed choices.
The simple market is that an ISP provide access at a certain speed, and possibly a certain amount, at a certain cost. In this type of market, Netflix does not use up any of the bandwith, the consumer does. No matter how you put it, it is the consumers that end up paying anyway. If they pay Netflix more since they have to pay the ISP or they simply pay the ISP directly does not matter. It will simply muddy the water, prevent informed choice and thus preventing the free market.
Biting the hand that feeds IT
