so, does this only pick up if somebody is downloading torrents? I don't see how they could figure out if a mediafire link someone is downloading is or isn't copyrighted material, because if they knew it would be taken down already. Can someone explain this to me in a more dumbed down form?
I think the copyright holder (or, as of July, perhaps just the ISP) would need to know said link had copyrighted material. While whoever said they can't monitor every download is absolutely correct, with the current state of Deep Packet Inspection
http://en.wikipedia.org/wiki/Deep_packet_inspection they can figure out what they want to know with relative ease, assuming they point it at you. DPI is a big deal, i think it's the most effective way to block Tor transmission as well (the protocol that lets you see the deep web, and also lets rebels in censoring nations get news to/from the outside world).
But I'm not really a computer guy so all this is a bit over my head.
I think an important question is, what is the incentive for the ISP's to do all this? It appears to be voluntary, but all the big ones have agreed to it. Do they get kickbacks from the RIAA and friends?