For the sake of clarity and brevity I will use TOS to refer to both Terms of Service (TOS) and Acceptable Use Policy (AUP).
After I wrote my post on the EFF's "Open Wireless Movement" essay I realized that in addition to trivializing the need for wireless security the EFF also failed to point out that sharing your home Internet connection is likely a violation of your Internet Service Provider's (ISP) Terms of Service (TOS). Violating your ISP's TOS could get your Internet service suspended or terminated.
For example, Comcast's residential TOS reads [emphasis mine]:
All Comcast High-Speed Internet customers and all others who use the Service (the "customer," "user," "you," or "your") must comply with this Policy. Your failure to comply with this Policy could result in the suspension or termination of your Service account. If you do not agree to comply with this Policy, you must immediately stop all use of the Service and notify Comcast so that it can close your account.
From the Prohibited Uses and Activities section [emphasis mine]:
resell the Service or otherwise make available to anyone outside the Premises the ability to use the Service (for example, through wi-fi or other methods of networking), in whole or in part, directly or indirectly. The Service is for personal and non-commercial residential use only and you agree not to use the Service for operation as an Internet service provider or for any business enterprise or purpose (whether or not for profit);
Verizon's residential TOS reads [emphasis mine]:
Termination and/or Suspension by Verizon. Verizon reserves the right to change, limit, terminate, modify or temporarily or permanently cease providing the Service or any part of it with or without prior notice if we elect to change the Service or a part thereof or if you violate the terms of this Agreement.
Restrictions on Use. The Service is a consumer grade service and is not designed for or intended to be used for any commercial purpose. You may not resell, re-provision or rent the Service, (either for a fee or without charge) or allow third parties to use the Service via wired, wireless or other means. For example, you may not provide Internet access to third parties through a wired or wireless connection or use the Service to facilitate public Internet access (such as through a Wi-Fi hotspot)...
Any, if not all, residential grade ISPs will likely have similar prohibitions against sharing your Internet connection with those outside of your home. Business services most likely don't have these restrictions, for example Comcast's TOS for business reads [emphasis mine]:
make the Service available to anyone other than your business or your business' authorized employees, contractors, or users (i.e. members of the public, customers of an establishment, hotel or motel guests and patrons, or persons in a residence hall or apartment building) unless done with Comcast's written approval in accordance with an applicable Business Services Agreement;
resell the Service or otherwise make available to anyone outside the Service Location(s) the ability to use the Service (for example, through wi-fi or other methods of networking), in whole or in part, directly or indirectly, unless expressly permitted by the applicable Business Services Agreement;
Comcast business customers can share their connection so long as they share it with people within their service location (at least that's the way I read it). I could not find any language in Verizon's business TOS that deals with sharing your business Internet connection with a third-party. Since it's pretty much expected that a business will have Internet access for their customers I'd imagine that most business class Internet service does not prohibit sharing the connection.
The residential sharing restrictions are mostly likely there to prevent neighbors (or neighborhoods) from sharing a single connection and splitting the cost of it, or one customer renting their connection to their neighbor(s) at a lower cost than what the ISP would charge (this happens). Unless the ISP could prove that this is what was being done, I don't think that it's very likely that Comcast, Verizon, or any other ISP would terminate a residential customer for simply having an open WiFi connection. It would be a dick move that could lead to bad publicity, especially since most people have no idea how or why they should be securing their WiFi. I have not heard of anyone being terminated for sharing their connection (inadvertently or otherwise) and I'm not aware that it's something that ISPs are actively monitoring.
I suppose there is the possibility that if the EFF's Open Wireless Movement has any degree of success it could wake a sleeping dragon and ISPs could start cracking down on Internet connection sharing (bad publicity or not) by suspending or terminating customers. Lest we forget that ISPs are greedy bastards - AT&T recently imposed bandwidth caps on their DSL customers. If we live in a world where ISPs think bandwidth caps are ok, it may not be completely insane to imagine that they might start driving around neighborhoods cutting off any customer that has an open WiFi connection; at least those who appear to be doing it intentionally.
I don't agree with the idea that I can't do what I want, how I want to, with a service I pay for. As I pointed out in my post Steal This Wi-Fi (the safe way) I have an open WiFi network at home so obviously I've never paid much attention to the TOS of my ISP. Again, I don't think (at this time anyway) that there is any reason to think that ISPs are going to start enforcing their sharing prohibitions. Then again, if sharing you Internet starts becoming the fashionable thing to do ISPs may start to take notice. After all, every person who uses someone else's connection for free is a customer that's not paying them for the privilege.
The real issue though is that the EFF published their Open Wireless Movement essay without mentioning that their recommended action (sharing your Internet connection) is likely a violation of your ISP's TOS and could get your service terminated. If anyone should know this it's the EFF but their essay makes no mention of it. Shame on them.