Build your own services and throttle everyone else's services unless they pay a premium (in which case your own services would be cheaper, but the profit they get from their own services must be higher than the profit they get from NOT selling the bandwidth their premium service uses, to third parties).
Let's put it this way, if a hotel builds a Jacuzzi, you're argument is that the hotel owner will only let their own family and friends use the Jacuzzi whereas they will charge anyone else more money to use it. But the time their buddies are using the Jacuzzi could be sold for a fee to the third party, so in order for them to rationally do this, they must gain enough favors that it justifies them to NOT make the extra profit.
In case of the ISP scenario, the Verizon Music better offer them higher profitability than letting it be used by actual Spotify and charging them. If they charge Spotify's $5 per month per user, then Verizon Music better bring them same or higher revenue or else running Verizon Music isn't worth it.
Business Model 2:
Invest in infrastructure and try to take over bigger market.
You're claiming "There is no way they will go for business model 2, they will go for business model 1". But you have no presented any reason why they would do that? We have reasons to believe that even when companies are very good at doing something internally, the parent company sells them off because it's a more profitable model.