Prohibitions against resale of their service to third parties, by providing many people internet connectivity: or by running a web server or other commercial service to consume their resources and derive profit from them.
There is a difference between wiring up my next door neighbor, and operating a web server including a wiki that provides a service over the general purpose internet to both my neighbor, and perhaps my friend on the other side of the globe, and perhaps the global public at large.
By your logic, operating a web or any server with many clients is tantamount to "resale of their service to third parties" because *technically* operating a wiki server is distributing the utility/value(of)internetservice to both my next door neighbor, and the rest of the world.
Now... personally, I might be happier with simple per-bit charging and the ability to resell service to my neighbor if for some reason they think they'd rather do that than purchase service from the same provider (perhaps they live on the border of the service area, or perhaps they view my firewall as a value-add to the internet service). But I'm not holding my breath for that even though it seems the most logical to me.
Are common restrictions: they are contractual rules, not filtering of applications, or non-neutrality.
These are subtle issues, don't try to gloss over the reality. What you described, are in fact common restriction, but what Google implemented, was a simplified language that "prohibits hosting any kind of server (without prior written permission)". If you actually read FCC-10-201 and where it lauds Tim Berners-Lee for having been able to invent the world wide web on top of the internet protocol "without having had to get permission from any government or network authority", you might begin to see the obvious problem with google's language. Though you won't fully realize the motives involved, until you stare at the abominable market for home server software that can compete with gmail, but provide enhanced 4th ammendment protections by being able to consider your data to be your "papers" at home, rather than something you entrusted to a company that is not at all concerned with your privacy if they think they can make a penny by selling it out.
It means that Netflix can't swoop in there, setup a residential datacenter: pay $30 a month for Google fiber, and saturate the network connections.
The way networking works, no one user can destroy the network. It's a shared resource. I might not be able to run a business like old-school slashdot from my home server (when they had 100K users already), but I might well be able to start something like an old-old-school slashdot (say, 1000 users) from a home server, and build up momentum and revenue to enable me to then scale as needed with servers beyond the ones in my home. You are saying that such aspirations can be thwarted by ISPs that also have non-broadband-carrier divisions that have been making billions operating their own servers on the internet. I find it _too_ convenient that the "unfortunate expansion of our terms of service safetynets" manages to horribly throttle the home server software market that Vint Cerf, in an interview in my college networking textbook 10 years ago, envisioned flourishing in the new IPv6 world. Or as he writes on Google's IPv6 education page.
Similarly... it means that ISPs or Tunnel/Proxy providers, or web hosting farms, cannot come in and abuse the service -- degrading service for other users, or imposing undue costs on Google, to pay for attempts to commercially exploit a service that is being provided for personal use.
When my neighbors all watch the latest thing released on netflix, and I see my pr0n bandwidth rates lessened because we share network trunks, can I claim that my neighbors are "abusing" the service? Or are they merely "using" the service? I just want my fair share, no more, no less. Sending a packet to or from a remote client connected to my local server, is no more or less expensive for the ISP than sending a packet to or from a remote server from my local client. QED.
