Oh yes they can. If I'm a consumer, I pay for my connection that is sold to me and held in my name. I have no right to "resell" or "sublet" part of that. It is usually spelled out in the Terms of Service or Acceptable Use Policy.
At the very least, consumer connections explicitly disallow "Commercial Use". That means that you can't use them to run a business. You can't use them to turn a profit. You can't use them to generate revenue. That means no running servers, and that means no "reselling 2% of your bandwidth" for a few pennies because some Euro-Trash-Stranger wants to borrow it!
You wanna run a business? Then get a business license, pay your business taxes, and sign up for a business Internet connection. That’s what they’re made for. Then run your servers to your heart’s content.
Okay, I can understand that there are instances where people want to run a website or some kind of server, recreationally, or out-of-pocket, or cooperatively, outside of a business/corporate context.
But I'd say it's fundamentally a market segmentation. ISPs don't want consumers running servers on consumer connections. Think about it. This allows ISPs to plan deployments better. Consumers should be, well, consuming downloads and content rather than distributing it upstream. Therefore, for example, my DOCSIS connection is 10x downstream vs. upstream. And an ISP's consumer-level backbone can be planned much more effectively when consumers are consuming downloads.
If you wanna run a server then go colocate it, or run it as a legit business. You've got to accept some market segmentation here.
I purchased a new HP printer recently, and it's firmly a SOHO printer. Perhaps more powerful than I really needed. And guess what? I found out that it's not really supported by Chromebook or Android drivers. So... I've got to bounce all my print jobs through Linux! Ah well!
Internet service should be as close to a dumb pipe as possible. It can be biased in one direction (though 10:1 is too much and future DOCSIS versions are remedying that) but even a slower upload can and should be able to do basic hosting.
so much of the early aughts small business and startups were people selling stuff and doing things out of ppls home. and not like the "startup industry" startups, actual startups
but aside from that, hosting a website or email server or newsgroup or game server with friends isnt necessarily hosting a business, not everything is a transactional relationship
At the very least, consumer connections explicitly disallow "Commercial Use". That means that you can't use them to run a business. You can't use them to turn a profit. You can't use them to generate revenue. That means no running servers, and that means no "reselling 2% of your bandwidth" for a few pennies because some Euro-Trash-Stranger wants to borrow it!