Why would customers choose an ISP that does such a thing?

Because the theoretical government was too small to force even a duopoly, so one provider has bought all the wires.

In the USA, technologically unnecessary government regulation of the wireless spectrum is the only reason the wires confer any sort of monopoly. If the FCC didn't exist, we wouldn't all be forced to use 1940s tech on all non-wifi bands, and our local loop to our ISP would be wireless, fast, and effectively free.

Instead, we have Ma Bell, Part II. I don't see how an evil corporation could have brought about such a situation without the enthusiastic assistance of the state.

Please, leave the wireless spectrum to the mobile devices and use the effectively unlimited spectrum that you get with wires for non-mobile devices. Spectrum is a scarce resource that really does need government oversight!

Why couldn't competitors install more?

When they try, the monopoly lowers its prices until the competitors are out of business.

Why couldn't competitors enter the market after the monopoly raises them again?

Why do you think they would have a choice? Compared to the situation in Europe, Americans don't really have much choice right now.

Because with a sufficiently small government, ISPs would not enjoy a government-mandated duopoly?

...instead enjoying monopoly unencumbered by some silly competition law.

Why couldn't competitors enter the market?

Because an ISP that takes payments from third parties to block content will thereby be able to provide lower rates to consumers.

Yes, and so people would be glad to choose that. And others would prefer to pay for the content (presumably, Coursera wouldn't be the only ones blocked), much like they do with almost everything else. Is there any market where only the cheapest can sell? I doubt it.