Internet industry, AT&T—the largest ISP in the U.S.—has offered an enthusiastic yes to these very questions. Beginning in 2007, AT&T brass began speaking positively to the press about taking on content filtering. As recently as the 2008 Consumer Electronics Show, AT&T re-affirmed its interest in pursuing technology to filter customer traffic for copyright-protected content.

The three-letter word that has reverberated across blogs, message boards, and industry analysts has been “why?”

To put AT&T’s eagerness to filter content and the resulting surprise into context, it helps to look at why ISPs don’t do this already.

When the controversial Digital Millennium Copyright Act (DMCA) was passed in 1998, ISPs did not want to be held liable for all the illegal activities, new and old, that their subscribers might engage in. Should the service provider be responsible if its users trade pirated software or state secrets or child pornography? It is impossible, the ISPs argued, for them to monitor everything.

Lawmakers agreed, and wrote into the DMCA the now-famous “safe harbor” provisions, which set about criteria under which ISPs are not legally responsible for the activities of their users. A key criterion is that service providers not block or modify content passing through their system. In effect, the law says, to maintain immunity from your users’ activity, hands off. To do otherwise suggests that you bear some responsibility for the content that flows through your network. Nobody wants that headache, and so ISPs have happily sheltered themselves under the safe harbor provision since then.

Yet, AT&T now seems willing to reverse course. By embracing the idea of content filters, the ISP with 18 million subscribers seems to be saying they will enthusiastically

monitor, block, or modify user activity and take responsibility for the content that flows through their network—all in the name of protecting copyrighted intellectual property.

To expand on the earlier three-letter-word reaction: “Why in the world would AT&T want to bring this on themselves?” Is this plan anything other than “corporate seppuku,” as Columbia law professor Tim Wu describes it?

Publicly, AT&T makes the case for bandwidth preservation. A small percentage of users, they argue, use almost 50 percent of the available bandwidth. These users trade copyright infringing files using network-clogging P2P protocols. In fact, this is a complaint echoed by many ISPs. Some, like Comcast, have taken steps to reduce the problem by other means such as downgrading or blocking P2P traffic— practices which have generated their own backlash and attracted investigation by the FCC.

By AT&T’s logic, content filters will rightfully block so much copyright infringing data from flowing through the network that subscribers engaged in legitimate activity will enjoy faster performance.

Critics like Tim Wu say that, taken on its own, this logic doesn’t add up. Surely the cost of buying more bandwidth can’t possibly be more painful than the cost of losing the safe harbor shelter and becoming exposed to potentially massive liability. Besides, they say, AT&T is a public company and is responsible to its shareholders, who aren’t likely to see the math here, either.

While we’re not privy to the AT&T boardroom, analysts presume that their new love for content filters is related to their interest in Internet prpotocol television (IPTV). Today, most ISPs earn money delivering data through pipes. But as Apple has demonstrated with the success of the