Business strategies based on Porter's work have the advantage of having been proven as general business practices and having succeeded for ISPs in the market today. But they are neither automatic nor guaranteed. Implementing a strategy is even more important than developing one. Get small, and stay small. The lesson of Porter's curve is that companies that can not dominate the market will become more profitable if they have smaller market share, up to a point.
Growth is a bad strategy.
So is acquisition and merger. Get small, get focused, and get profitable. Get out of the commodities market. The residential dial-up market will continue to be a commodity where only a player with large resources and the ability to survive on thin margins will win. Those companies are on the right side of Porter's curve.