Alexander, I've just read your article and think it's great. It's answered a number of questions I had about the relevant laws.
Earlier today I e-mailed both ICO and the Home Office to find out what the nature of the advice they had given Phorm was (though I doubt they'll actually tell me - it's not like I pay their wages or anything
). I also raised with them the issue of web hosts opting out as that seems to have been avoided by Phorm and BT so far. I had come to the same conclusions as you regarding the Copyright Designs and Patents Act with regards to publishing a derivative work, and likened it to making a copy of the Times, Hansard, etc adding a load of adverts and then passing it on (I assume they will understand that).
Has anyone heard anything from Phorm, ISPs, ICO or Home Office about the rights of web hosts beyond the implied consent argument (FTR I explicitly do NOT consent and shall be forwarding the details of my sites to the relevant parties)?
As I am partly responsible for a commercial site (children's furniture), I would not be happy if, as a result of searching for children's furniture someone visited our site and was presented with a load of adverts for other manufacturers / resellers seemingly advertising on our site.
Thanks again to Alexander for his (I'd say tireless, but I guess he's tired) great work.
Forgot to mention - I actually asked Phorm about the opt-out options for web hosts, but I'm not holding my breath.