Exactly this happened to the monopoly ISP/telco up here in the Yukon, Canada.
When the CRTC announced they were slashing the prices of the telco's proposed "bulk data pipe" products by more than 70%, the telco responded by saying they were no longer going to keep expanding their fiber network to more communities, because "it wouldn't be profitable to do so given this harsh pricing scheme".
There was huge outcry, and everyone pointed out this is exactly the reason a monopoly is bad, because they can hold everyone hostage, etc. etc.
The final result? The CRTC caved, and let the ISP/Telco charge whatever they wanted for the "bulk data pipe" products.
It's not hard at all when the CRTC subsidies said Telco/ISP for tens of millions of dollars annually. The internet products are some of the most expensive in the entire world.[1]
When the CRTC announced they were slashing the prices of the telco's proposed "bulk data pipe" products by more than 70%, the telco responded by saying they were no longer going to keep expanding their fiber network to more communities, because "it wouldn't be profitable to do so given this harsh pricing scheme".
There was huge outcry, and everyone pointed out this is exactly the reason a monopoly is bad, because they can hold everyone hostage, etc. etc.
The final result? The CRTC caved, and let the ISP/Telco charge whatever they wanted for the "bulk data pipe" products.