As a far as cops go, that wasn't good policing.
The Internet , or more precisely , bandwidth is a consumable product. As much as music is : the difference is that one is consumed because it is a tool (although in many ways it could be argued that it is also entertainment), and the other is consumed for pleasure (although it can be argued it is also a tool ref. Guantanamo Bay Music torture).
You are mixing up the economic category of something with its intended use. These days iPods and Coca-cola are both classified as FMCG (Fast Moving Consumer Goods) ...I am sure you'll agree their intended use is very different.
The relationship of a "tool", goods and services depends strongly on perspective because a "tool" is not an economic category. I will exemplify with an extension of my analogy with your logic. If you are an ISP, the Internet is the consumable, while the cables and servers that host it are the "tools". If you are a server manufacturer, the servers are the consumable, while the things that let you make a server such as air-conditioning for your design plant, the electricity that runs through is the "tool". If you are the power company,....well you get the picture.