I was going to ask that same question but decided to read all the other comments first. That practice should be illegal IMHO. That is altering content. Creating derivative works? It'd clearly be anti-competetive if the replaced others ads with their own.
IANAL but it seems they could lose safe harbor protections provided by DMCA and be liable for ALL copyrighted material going over their system:
"Section 512(a) protects service providers who are passive conduits from liability for copyright infringement, even if infringing traffic passes through their networks. In other words, provided the infringing material is being transmitted at the request of a third party to a designated recipient, is handled by an automated process without human intervention, is NOT MODIFIED IN ANY WAY, and is only temporarily stored on the system, the service provider is not liable for the transmission."
Our common network software should be designed with the expectation that the middlemen (including your ISP) are actively hostile, and include defenses against their attacks. Making the html stream inaccessible to them is a first step in that direction.
That mandates copyright holders suing for copyright infringement and/or the statutory fees they are due from the creation of derivative works.
I would suggest that an argument could be made for some sort of fraud as well, for not delivering "the internet" (would have to consult with a lawyer to be sure).
Throwing protocol changes and such will not work in the long run, because you're trying to fix this in the wrong problem domain. This is a legal and political issue, not a technical one. If there is a desire to fix this idiocy, time is best spent where it is most effective.
/I suggest political action towards hitting the big ISPs with the Sherman & Clayton Antitrust Acts. These ISPs are patently abusing monopoly power in various ways.
Switching to HTTPS everywhere means that we have to drop the traditional CA model; certificates from CAs are just too expensive. (Replacements are either DANE, which depends on DNSSEC, or Namecoin, which replaces the DNS system entirely and has many problems of its own.) Expect all this to be fought tooth and nail.
What is this, 2005? StartSSL offer free SSL certificates that are trusted by all browsers. If that's too cheap, you can get a Comodo certificate through Namecheap for $10 a year...
If you can afford a domain, you can afford an SSL certificate...
Have you not been paying attention to the Heartbleed thing? StartSSL is a scummy company that breaks the rules they've agreed to with browser vendors. I would not trust them if I had a choice in the matter.
I have a bunch of domains which, frankly, I don't care enough about to pay money for an SSL certificate for.
They're probably selling the opportunity to ad networks. IOW, the site operator 'O' contracts with ad network 'A', and A uses data from the ISP to decide which ads to serve to which clients via O's site.
So the ISP is not necessarily interfering in O's contract with A by replacing ads or such -- at least, it doesn't necessarily work that way. I really don't know, some ISPs have been caught replacing content or injecting ads, but in principle the scheme could be managed without doing so.
(My description is from descriptions a few years ago when ISPs were sneakily trying a DPI setup)
