It looks like internet-wide content filtering is being discussed already:

Mr. Cicconi said that AT&T has been talking to technology companies, and members of the M.P.A.A. and R.I.A.A., for the last six months about carrying out digital fingerprinting techniques on the network level.

It sounds like it's still very preliminary, but I would bet this is coming sooner or later.

If only these people could think of a revenue model other than lawsuits. Maybe someone could start selling RIAA lawsuit insurance to distribute the cost of those out-of-court settlements over the whole population. We could call it "privatized taxation" to get bipartisan support.