As many as 10% of all U.S. ISP customers may be subject to deep-packet inspection of their Internet traffic. Unnamed ISPs have contracts with ad agencies, such as Front Porch and NebuAd, that permit them to monitor customers' activities. Front Porch can track 100,000 U.S. users and NebuAd can track up to 10% of all U.S. users.
How can ISPs do this? It's because customers agreed to let them monitor their Internet activity by accepting the terms of their ISP's service contract.
Read more about it at "Can an Eavesdropper Protect Your Privacy?," "Every Click You Make: Internet Providers Quietly Test Expanded Tracking of Web Use to Target Advertising," "I.S.P. Tracking: The Mother of All Privacy Battles," and "Web Service Contracts Say ISPs Can Block Sites, Snoop."