They don't have to police it, but they don't have to facilitate it either. ISPs should be just as free as any other company to decide who they want to do business with.
I far preferred it when we had a more diversified eco-system and long run I think we will come to regret this monoculture. But it is hard to spell out exactly what could be done to resolve all this without having the various negative side effects as well as a method of dealing with the now entrenched and very powerful players.
We need 500 search engines, not three, and 500 browser manufacturers, not four. And open, well published and not-dominated-by-a-single-entity standards.