Your Internet Service Provider has access to a ton of information about what you do on the Internet. Afterall, they provide you with the ability to surf the web.
Recently, Wired Magazine wanted to know just how much information those companies keep, what the discard, and what they pass along. The results were sort of scary.
For one, four of the largest ISPs in America simply didn't respond to their survey, even after repeated attempts to get them to answer questions. Comcast, EarthLink, Verizon and Time Warner didn't participate.
The other providers, AOL, Cox, AT&T and Qwest gave mixed answers. When asked how long they retain IP addresses on users, information the government could use to track you down if you were doing something naughty, Cox answered "six months," AOL and AT&T said their time periods were within "Industry Standards" and Qwest tried to avoid the question.
The other important area of information is whether ISPs keep track of what sites you visit. These could, potentially, be sold to companies to help advertise to you. AOL, AT&T and Cox all said they didn't keep this info at all and Qwest, again, didn't really answer.
Long story short? ISPs know more about you than you probably want them to. This means that advertisers and the government might know more about you than you want them to, too.