RE: Is Panarchy The Answer?

Coercive force would be required to prevent peaceful people from voluntarily entering into contracts with the form of government of their choice.

I don't see anyway you could get around allowing people the freedom even to choose not to be free by signing a contract that allows a government to coerce them according to the rules of the contract.

If we all agree via consensus that aggressing against other is wrong (whereas using coercion only against those who have explicitly agreed to be coerced is not aggression) then Service Providers aggressing against each other would be no different than individuals aggressing against each other in your model. In both cases it would be recognized as illegal, and addressed accordingly.