The Big Three deliberately differentiate their brand tiers. The bottom line in any negotiation is the point where one party walks away from the offer, The Big Three "flag tier" brands target business and corporate and government organizations and simply will not cannibalize or "de-value" their profits beyond their (arbitrary) minimum threshold. Their "flanker tier" brands attract mainstream consumers and their "value tier" brands catch customers with mercenary loyalties.
A lot of people refuse to "downgrade" because of an (artificial) perception that doing so will reduce quality or reliability of service. The Big Three work hard to maintain this belief, it's worth extra revenue for them, they won't go below their bottom line.
Google "veblen goods", "giffen goods", and "conspicuous consumption".
