Linked by Thom Holwerda on Thu 15th Mar 2012 22:06 UTC
Legal "If you download potentially copyrighted software, videos or music, your Internet service provider has been watching, and they're coming for you. Specifically, they're coming for you on Thursday, July 12. That's the date when the nation's largest ISPs will all voluntarily implement a new anti-piracy plan that will engage network operators in the largest digital spying scheme in history, and see some users' bandwidth completely cut off until they sign an agreement saying they will not download copyrighted materials." One day, years from now, historians are going to debate whether this was the point of no return.
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I suppose that your ISP can know that you're downloading/uploading torrents, but can they know just what you are downloading or from whom?

What you're downloading? For unencrypted connections it is possible. For encrypted connections it's theoretically possible but practically impossible. No, the snake-oil products that that say they can do this does not count.
As for whom your downloading from; yes they can see what IP addresses you're communicating with unless you're using something like Tor or a VPN.

If so, how much additional overhead would it entail?

On any reasonably modern computer the overhead is negligible.

I have thought of enabling my browser's feature to encrypt all connections for HTML, but I think that would also cause more overhead though I'm not sure how much

This is not a feature that you can enable, you have to use https:// rather then http:// and even then there will be connections and sites that are not encrypted.

And how do I enable that feature in my browser or torrents once I've paid?

All you have to do is connect to the VPN, you don't need to changer anything in your browser or torrent app.

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