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Actually, the solution is even simpler. Cut all regulation altogether,

What I don't understand is why the US government is involved at all in this.

The British government didn't have to do anything for ISPs to offer tiered services. They advertise super-cheap service for £10/month (or less, the cheapest is £2.50 plus the phone line rental). That's unlimited, I suppose the networks have been upgraded to offer FTTC/FTTH so there is no longer the choice to get a super-cheap limited ADSL service -- it's all cheap.

There is an option for capped FTTC, which is a few pounds cheaper per month than unlimited (for my ISP, unlimited FTTC is £20/mth, 40GB/mth is £16/mth).

The government regulation in this:
1) false advertising isn't allowed
2) ISPs have to set out how they do traffic shaping in a standard way, the £2.50 deal's terms are here.
3) They required the ex-nationalised company to rent out the last-mile cables, then their telephone exchange space, at the same rate to everyone (including that company's own broadband service).

The article isn't very trustworthy and that image is quite misleading. The image is of an optional filter that has existed for a while ( http://www.talktalk.co.uk/security/homesafe-demo.html ).

The original source is this: https://www.openrightsgroup.org/blog/2013/sleepwalking-into-censorship
In that article this is said:

After brief conversations with some of the Internet Service Providers that will be implementing the UK's "pornwall" we've established a little bit about what it will be doing.
[...]
The essential detail is that they will assume you want filters enabled across a wide range of content, and unless you un-tick the option, network filters will be enabled.
[...]
EDIT NOTE: the category examples are based on current mobile configurations and broad indications from ISPs
[...]
The precise pre-ticked options may vary from service to service.
[...]
We can't say precisely what categories each ISP will provide – but they will be (as I say something like this above.

The key is the first screen, with the pre-ticked "enable parental filters" box: you will be encouraged to walk through to enable filters across a range of content, not just porn."

I imagine the 'brief conversations with some of the ISPs' went like this:
- "So how are you going to implement the porn filter?"
= "Well, I guess we'll make a webpage where people can opt out of the filter."
- "Something like TalkTalk Homesafe?"
= "Yeah, something like that."

No, BT's range of competing ISPs will get a lot more popular. Virtually everyone who can get BT can get one of those and be switched over to them in two weeks (just switched to O2 from BT, best move I ever made - BT are retards).

I'm no particular fan of TPB, I think they're a bunch of dicks, but for christ's sake blocking access is not the answer for the British record industry. Legal downloads, although markedly less profitable, are still something of a money-spinner for them, and given some of the shite that has reached No.1 recently they must be selling something...

I suggest you start here Mobiles through the ages and come back here once you are familiar with the subject you are commenting on. Got to love people who are experts on subjects they don't understand.

It's expensive, although much better than last time I looked at a similar ISP.

I pay £18/month, including the phone line rental -- I get 40GB/month although I'm not aware of ever hitting that limit. There's also unlimited UK landline calls. (It's with TalkTalk, who recently spoke out against the proposed pro-big-media copyright laws, which was a nice surprise. I only picked them because they were cheap.)

Yesterday I noticed an advert for broadband for £6.95/month (not including phone line), with Plus.net. That's only 10GB/month.

A mobile broadband package with a 15GB cap only costs £15/month if you're willing to put up with a 24-month contract. You could get two of those and have a combined 30GB/month cap and still be paying less than the £42 you seem to think is normal.

My old ISP here in the UK, TalkTalk, restricts P2P openly, here is the FAQ entry about it

Talk Talk offer free broadband if you sign up for their (already cheap) phone package. In total it costs £21 a month (about 40 dollars). We just switched, partially because my current provider (NTL) have had connection problems all day and their technical support is crap.