h2odragon voted 1 on this story.
I've had cause recently to make a few informal queries on the subject of disclosing client information. I will certainly notify my customers before answering any sort of official (and probably most unoffical) questions.
Several of the folks whose opinions I've sampled would also notify the customer as well as terminating any services, which is a much more interesting question. Folks who are just in business would rather not have the hassle (understandable), which could quickly lead to easy and effective censorship by anybody who can get a subpoena issued... or perhaps even sound legitimate while making the threat.
I've heard of FBI agents assuring ISPs that subpoenas for client information were a common matter, to be settled the same day via fax. That might leave time for notification but probably not sufficient to allow for a real response by the client.
Mr. Sobel's comments at the end of the ZDnet article are well taken, though I've got to wonder what "all the major ISPs" are. Yahoo is certainly major, they are supplying services, they didn't provide notification...
How many of us who are not major ISPs, yet provide services, care to participate in this kind of a fight?