More links that have some of the ramifications baked into the article.
http://variety.com/2...-utility-1201422752/http://www.washingto...utrality-rules-ever/http://venturebeat.c...ill-immediately-sue/The issue is Net Neutrality, and how the ISPs regulate internet access more than any of the questions that you ask. Reclassifying it as a Title II utility will give the Feds more power to regulate the access. This has a couple of big ramifications that are different than the direction that you're looking at:
1. They could regulate how the major players limit access- and indeed remove all right for them to do so, and then enforce it.
2. Smaller providers that don't have access to what is really a government funded initiative will again have access, creating more competition.
Now, these two points do affect your basic questions.
1. The reasoning that they're using to classify the internet in the same way as gas and water is because in this age, the internet to a large extent has become a necessity for the common citizenry to function in society. As far as the monopoly part, it's based on the fact that the infrastructure required to operate as a provider is prohibitive.
2 and 3. The implementation of the reclassification would allow more access so that Comcast/Xfinity/Whomever has a virtual monopoly in your area would have more competition, driving prices down and increasing competition over service quality.
4. The purpose of this is to create less restrictions. In theory, the internet is unrestricted- but that is only as much as your provider makes it so. If there was the ability to regulate and tell them that they can't restrict and enforce this, then you'd enjoy this as a matter of course, rather than at the whim of your provider.