To your two pricing questions, the answer is "sure, but":
1. Verizon, as a monopolist, is already pricing its service at the level that extracts the most revenue while remaining within the envelope of whatever loose regulation they have.
2. Netflix, as a company in a competitive market, can't easily increase prices without losing customers. If Netflix charges Verizon customers $9 and Hulu is only $8, it makes Netflix look less attractive, and they'd lose customers.
Agreed! But they're closer to interchangeable than say 50/5 Mbps cable service and 56.6kbps dial up. Which is some places is your only alternative to Verizon.
Further Netflix isn't the only place to get movies. I can get movies from Amazon (streaming or DVD) Walmart, and other physical stores. I don't have that same kind of choice in ISPs though.
IPSs have more of a monopoly on their subscribers than video intermediaries do. The studios can release movies through a half-dozen channels. I would (figuratively) KILL for the chance to pick from a half-dozen ISPs that have offerings which are reasonable for the modern age.
1. Verizon, as a monopolist, is already pricing its service at the level that extracts the most revenue while remaining within the envelope of whatever loose regulation they have.
2. Netflix, as a company in a competitive market, can't easily increase prices without losing customers. If Netflix charges Verizon customers $9 and Hulu is only $8, it makes Netflix look less attractive, and they'd lose customers.