The GP's concern isn't a practical one, it's ultimately about net neutrality. It's not the ISP's job to discriminate against traffic—it's their job to deliver it.

This may seem like a good idea, and frankly is likely a net-positive thing, but it is literally the definition of "ISP decides what apps its customers can and cannot use."

I share the concern and don't really like it either.

It's not a net-neutrality issue because they're not banking on any alternative.

Net-neutrality law doesn't work like that. Service providers still get to filter stuff.

What's illegal for an ISP is e.g. to give VoIP services other than their own a lower priority. That would tie in customers to use their own service and they could even charge more for it. Net neutrality means a level playing field for services on the Internet.

If you ask your ISP to do filtering, that's perfectly legal. If they filter specific traffic for the purpose of maintaining service, that's okay too.

Now if there was no alternative and they'd try to sell their product by blocking telnet, they could be sued.

There is some merit to the end user ISPs doing that - for example one I used before filtered SMTP traffic (and iirc some other) to the client unless you opted out from it.

Which was mildly annoying workaround for the power users (disabling it was just changing the ppp login), but stopped a lot of accidentally open open relays and a lot of other cruft