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How does my ISP know if I uncap my cable modem?

ISP Monitoring of Cable Modem Uncapping

Your ISP and/or cable company monitors the network. If your neighbors hold an “uncap cable modem” party, the ISP can detect that your neighbors' bandwidth is above specified limits. The ISP can query the network to find your MAC address (not to be confused with Macintosh) and identify you as the source of the uncapping. In addition, many ISPs have modified the config file sent to the modem to detect when the cap is exceeded, at which point the modem shuts down. No matter how clever the uncapping machine or cable modem uncapper, the ISP can still catch you.

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