This article make a couple of disingenuous claims, so much so that if I didn't know better I'd think it was FUD from a big US Internet carrier. At the very least it demonstrates a lack of familiarity with the North American market.
The problem is not "blocking" big players like NetFlix or Hulu by ISPs. Of course, doing so would be counterproductive for any ISP since they are such visible targets and a large part of why customers sign up for Internet access in the first place. Also, those services are already large enough to do an end-run around such impediments. NetFlix, for instance, started a program with ISPs where the highest quality streaming (Super HD) is only available to the ISP's customers if certain technical specifications are followed by the ISP. This had the effect of motivating ISP customers to get noisy about the quality of NetFlix streaming provided by the ISP. Heavyweights like NetFlix can do this... smaller and new players cannot.
The author erects a giant straw man by repeatedly stating that ISPs would be foolish to block content that customers want, when in fact the issue is not outright blocking but degradation of competing services. Lower resolution video streaming and stuttery VOIP may not be an explicit block, but can subtly push customers in the direction of the ISP's own "uncompromised" offering, especially since viewers are unlikely to realize the shortcoming is not the fault of the service they are trying to use. The author scoffs at the judge's suggestion that customers would not know their services were being blocked, but if NetFlix works but constantly rebuffers just as the killer is revealed, how many would realize the cause is their packets being "shaped" rather than a flaw with NetFlix itself? The corollary can also occur, the carriers can build networking infrastucture that is only used to improve the performance of their own services. This would seem to be less problematic, but in fact the duopolistic nature of the North American ISP landscape makes it impossible for anyone but the largest concerns to do the same. Most areas have at most two choices for an ISP in North America, cable or DSL, with both vendors being equally protective of their own services. The cable providers don't want to cut into their own cable TV bundles, and DSL operators frown on VOIP competitors to their own long-distance voice services. Huge players like NetFlix may have the financial resources to build up some of their own infrastructure, but again, emerging services are at the mercy of the entrenched carriers and are easily smothered at birth.
It it not just the ISPs that are a threat to smaller or niche players either. Long-haul carriers, the "backbone" of the Internet that connect one ISP to another also do their own "traffic shaping", often to the detriment of specific services. Here in Canada there are only two backbone carriers, Bell and Rogers. No matter who your ISP is, your packets are transferred by one of these two companies. Bell in particular started throttling BitTorrent packets a couple of years ago, and Rogers does something similar. What this means is that the consumer has only an illusion of choice since the services available are actually determined by the backbone providers, not the ISPs. There is no ISP available to the Canadian consumer that does not throttle BitTorrent traffic, simply because the ISPs are all at the mercy of Bell or Rogers.
The "Big Two" in Canada even tried recently to impose an end to flat-rate unlimited billing on the ISPs forced to resell their backbone bandwidth. Traditionally independent ISPs have purchased huge blocks of bandwidth from the backbone carriers, which they have then been allowed to sell to customers as they see fit. This allowed independents to offer true flat-rate unlimited packages that were offset by their other customers using relatively small amounts of bandwidth. This allows streaming video services to compete against cable TV bundles, since like bundles, customers can choose a bandwidth with a known monthly cost that will not balloon no matter how much video is viewed.
This doesn't sit well with Bell and Rogers, the incumbent Satellite and Cable TV providers respectively. They argued in court that independent ISPs should no longer be able to bill their customers as they like, but would have to instead introduce "usage based billing", where rather than selling the independents a block of bandwidth they could resell as they wanted, they would be billed on individually metered packets and would have to bill their customers that way too. This caused a huge outcry in Canada, as cord-cutters and heavy NetFlix users rightfully anticipated huge monthly bills and uncertainty. Luckily the CRTC (Canada's FTC equivalent) saw the light and quashed the uncompetitive initiative.
Packet "favouritism" by ISPs makes it harder for the "next big thing" to gain traction in the marketplace, and actually entrenches the big boys in a market the new guys can't penetrate. If you have a great idea for a new service, but it has the potential to cut into sales of the ISPs own offerings, the ISP has great incentive to make your service less attractive by throttling.
The big incumbents in the NA market like to squawk that the independents are piggy-backing on the infrastructure investments made by the big boys, but they conveniently forget that they are the incumbents due to decades of government enforced monopolies, originally intended to encourage the build out of expensive infrastructure in under-served areas, but now having the exact opposite effect. Bell in particular benefited from nearly a century of being the only game in town due to government decree. Even though deregulation has made it theoretically possible for infrastructure competitors to arise, the mammoth cost of doing so gives the incumbents an almost insurmountable head start.
This situation makes the Internet backbone similar in practice to the public airwaves. There are many laws in place to ensure that the finite bandwidth available for radio transmission is allocated for the public good. Although technological advancement occasionally increases the highest useful radio frequencies or increases the number of channels within a given frequency range, radio spectrum is basically limited, and so it must be carefully allocated to ensure maximum benefit to its true owners, the public.
With so few immovably entrenched backbone incumbents in North America (even worse in Canada) backbone bandwidth has become a scarce resource like the airwaves. I don't know what it is like in the rest of the world, but I suspect most non-residents of NA don't realize that several of the backbone providers here are also huge content providers, and so are inherently in competition with the independents that have no choice but to buy their bandwidth from them.
Contrary to the author's argument, there is a REASON so many voices are raised in alarm at this recent court decision. Those affected by it, the residents of USA, and indirectly, Canada (since CDN carriers follow the US lead), know that giving de facto monopolies with a long history of price gouging control over which packets and services are favoured is bad for consumers and for innovation.
In a world without the relatively neutral Internet of the past couple of decades, NetFlix wouldn't even exist.