It's not just a question of transit capacity. Most residential PONs are still oversubscribed, like the fiber cable running down the street can't handle all clients maxing out their throughput all the time. With PONs you'll have multiple clients all sharing the same physical port, in the same way in coax DOCSIS networks. One single cable goes through multiple passive splitters to branch out to a lot of final clients. They almost always wouldn't be able to support all clients maxing out all their bandwidth even if that traffic never left the local office, because once again its still dozens of clients on a single actual physical port.

Fiber to your home doesn't mean you've got dedicated bandwidth to your ISP. You're still usually on a shared medium. You're likely to get all your speed most of the time though because most residential customers aren't constantly using anywhere near a gigabit of throughput constantly.

That said though, a regular ISP can just run another line out. Starlink can't just will additional useful frequency ranges out of nothing. There's only so much spectrum to be used in the giant shared medium of the sky. Beams are only going to be so tight at those distances (outside of using lasers), only so many useful orbits, etc.

This is incorrect. Youtube does not in network content caching. That’s pretty unique to Netflix.

Youtube meets you at exchange points and if you’re an ISP anywhere that isn’t a major city, there isn’t an exchange point there.

Take a place like Boise and a municipal fiber provider there. They aren’t big enough for Netflix to offer an OCA and there isn’t an exchange in Boise with good content provider density on the fabric. So that provider needs to pay for transit or a private lease to the nearest big exchange (SEA, PDX, barely SLC) where it can get connectivity.

Your mental model is completely wrong for ISPs that aren’t serving the same city as one of the <10 major exchanges in the US.