If the small shops / "mom and pop shops" are overselling the bandwidth that they have by that much, then I would say that the issue is with the small shops themselves. There is no issue for the small shops if they are not massively overselling their connectivity.
I also do not think there are many small shops selling broadband Internet Connectivity in the USA. Where I have have seen small shops is in rural areas where they are selling Microwave based Internet which is usually very expensive for the bandwidth compared to cable/dsl and has much lower throughput and high latency.
Anything that requires "cables" generally has a monopoly. Sometimes this is shared in the cases were you have both a telco and cable provider servicing the same residence. In extreme cases you may have a third entity if Google or another company is running fiber lines, but that serves less than 1% of the population. These monopolies are granted to the service providers by the municipalities so there is no "true" competition or incentives for the service providers to increase bandwidth. In most cases there is a disincentive since that could spark a "bandwidth race" with the other service provider in the area which just increases the operating costs.
Now, if they do not have to invest in their networks, but they can charge companies on the Internet that rely on bandwidth (such as Netflix / streaming services in general / gaming / etc) so that they can be prioritized on their over saturated networks without investing in their infrastructure - it is a win win for the service providers. Which is why, IMHO, Verizon/AT&T/Comcast/etc are so against Net Neutrality being enforced. Without Net Neutrality, to me, it is like Google Adwords were the Telcos/Cable Companies can have all of the services that want bandwidth bid against each other to have top priority or even exclusive access to their networks.
If last mile Internet Service was actually a free market commodity were anyone could be a service provider, and lay their own cables, I would not see this as such a big issue since people would be able to vote with their wallets if they did not like the fact that X company was restricting their access to Y service. But, the way it stands right now, the end consumer really has little to no choice over their broadband provider which means someone (or some governmental entity) has to prevent them from abusing their monopolies.