I'm living with a few relatives right now and we just happen to be sharing an internet connection. However, it's been down for the past three days and when we called to ask why they agreed to send someone out to take a look at the lines, but my cousin ( whose room houses the cable modem ) instructed me to remove the router I had installed to share the connection because the ISP doesn't know about it.
That got me thinking, can an ISP forbid you from sharing an internet connection? Are there mechanisms in place to auto-disconnect people who are found to be sharing internet connections? I always believed that they couldn't, because the only way around that when there are a group of people that need internet access living in the same house is to have (and pay for) separate connections for each of them.