It seems like the problem as you're phrasing it is that they are deliberately harming consumers -- it costs them the same to deliver the content whether via Netflix/Hulu or their own services, but they are choosing to overcharge customers to force them into their own service.

An alternative way of looking at it is that their own service is offering a subsidy -- bumping you up implicitly to a higher tier in exchange for using their service.

In the latter case, it's not really abusive; they're offering an enhancement; the "actual" price is the next tier up, but you're getting a "discount" in exchange for preferring their own video service.

Which is to say that this is awful behavior, and nothing is more frustrating than the fact that (the lack of) competition makes it so that it is nearly impossible to switch to another internet provider that does not engage in this kind of monkey business. The other problem is that I think many customers prefer this model -- they're willing to make the sacrifice and get the subsidized package rather than shell out the extra money. I'm certainly guilty of this; avoiding paying minuscule subscription fees for websites even though I hate the ads. The value of my hatred is still lower than the cost of the subscription.

I feel you are out of the loop with the whole net neutrality fiasco (https://www.eff.org/issues/net-neutrality)

The current FCC may be too industry friendly, but it will not be that way forever. We, as consumers, need to continue to fight against these monopoly providers that are harming us.

Given the repeal of federal net neutrality regs and California putting it's net neutrality rules on hold pending the result of a federal lawsuit, under what active law is the illegal?