By making the low tier free, they avoid many costs. Billing. Tech support. Compared to their gigabit-chewing neighbors, the free tier isn't even using bandwidth of any significance.
Supporting a middle tier would cost as much as the high tier in everything except bandwidth. The one-time payment of the free tier helps pay for the infrastructure in the neighborhood, but doesn't incur any real costs after that. (I expect customer support for free will consist of a web form to report an outage, and a wiki.)
Cellphone? However, I suspect they could automatically detect outages based the in home battery backed up router not responding or losing contact with all other devices on the network.
Supporting a middle tier would cost as much as the high tier in everything except bandwidth. The one-time payment of the free tier helps pay for the infrastructure in the neighborhood, but doesn't incur any real costs after that. (I expect customer support for free will consist of a web form to report an outage, and a wiki.)