Yes, ads from service providers are legal. Some streaming companies (like TuneIn) use the to stay in business, and pay their staff. TuneIn tends to use ‘pre-roll’ advertisement, rather than inserting their ads into the stream in the middle. But all of these companies need to make money in order to provide you a service. 

There’s some instructions for blocking the adds here (I haven’t done this, no idea if it works ymmv)

Not sure what streaming service you’re using at the time you receive the ads, however, I think it would actually be illegal for your current internet service provider to block ads from competing services.  But not sure what your local laws are.

I haven’t described the situation adequately.  The ad was from my local electric utility, urging me to switch to them for wifi.  It wasn’t an ad imbedded in streaming service such as TuneIn.  I was live streaming a radio station that doesn’t have ads.

Just to be clear: the electric company isn’t providing my wifi but they’ve found a way to ruin my listening by blasting an ad before my Sonos streaming starts.

Curious as to how this makes an ad illegal. 

It’s not unusual for ads to be targeted using specific marketing data, in this case potentially your zip code, and sent to you in that fashion. The path by which that data can be shared with a streaming company can certainly be convoluted. 

You may want to start by reading the Sonos privacy policy, but depending on where you have that stream coming from, you may need to look further.