We can look at traffic types, but how can we tell what is legitimate content and what is not? Ellacoya can't do that.
We can look at the signature of encrypted traffic and know it's bittorrent for example (So we can shape the traffic), but how can we be sure that there is an illegitimate transfer going on behind the encryption? There is certainly legitimate content transferred via torrents, and in my view legislation to block it entirely isn't an effective answer. I can see some broadband suppliers going down this route though and maybe even using these developments as a smokescreen for doing it. I think that's especially going to be the case for the companies who must try hard to maintain good / exclusive relations with the big content distributors, Hollywood etc.
Of course we would have to co-operate fully with any UK legislation that comes into force, but you can be sure that we will involve ourselves wherever we can in protecting our customers and our product range. As an 'proper' ISP, we certainly have no desire to be the Internet police, quite aside from the arguments about who should pay for all of the extra resource required to do that.
From a personal perspective, I believe it is perfectly easy for the copywrite owners to find ways to counter the unchecked distribution of their material. I believe they should start with fairer pricing and serious consideration of alternative revenue models. For example, with the use of subscription services that allow downloads of all the music I want for a fixed fee, or by providing me extra value that I just can't get via bittorent. Additionally, there are huge back catalogues of great music which are out of print and not available on any legitimate download sites - that is just a wasted opportunity.
What the removal of P2P and Usenet would mean for the network is certainly more bandwidth to go round for other purposes, and with that we could probably provide higher usage allowances on some of our products for the same price. Whether that inherently would make the service more stable remains to be seen though...
Ian