Of course they’re not. It just might get more complicated for users but it’d be super easy for them to set up cloaking. uBlock could deal with that, ISP won’t.
Either way that will never happen obviously; Why would an ISP “block ads”? They’re literally hosting Google hardware (specifically YouTube’s cache)
In France, Free (one of the major telcos) has done exactly that. They block ads from the router that they give to their subscribers.
I guess they may be doing that to save bandwidth... They also have a tendency to offer features that few of their subscribers use, or even know about (some of their routers come with built-in VPN servers and torrent seedboxes).
I can see ad-blocking as a feature an ISP can try to sell. Imagine an ISP-level PiHole. (I can see this selling easily given how many family and friends asked me to install PiHole for them.
Either way that will never happen obviously; Why would an ISP “block ads”? They’re literally hosting Google hardware (specifically YouTube’s cache)