Yes and no.

I doubt they would be monitoring your connection to see exacly what you were doneloading.


It is more likely however that they are talking about, that if they get a complaint from the RIAA (yes they have probes looking for mp3s) you will loose your service.

If there were alternate ISPs I would not care. If they catch me, which is remote, I can just get another ISP.
But if it's the only broadband in town, I might be a litttle bit more carefull.