I know that in times of eMule and Kazaa Dutch ISPs used to actually (and legaly) cache data localy.
At the time it was a win-win situation for both users and ISPs. Users would suddenly notice their download speed increase drastically, and all cached data wouldn't cost the ISPs bandwidth/traffic for data coming from beyond their own networks.
With BREIN being as agressive as it has proved lately, I am not sure what the current situation is regarding the legality of local caching by ISPs.
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