This law makes any noncompliant service a "publisher", liable for all content on the site - unless you follow the DMCA. Upon receiving a takedown notice, the service provider must take down content immediately, and issue a notice to the supposed actual content owner. Content owner has a short period in which he can file a counter claim and keep the content up for a little bit while the two sides argue.

Service provider becomes a publisher, liable for your potentially illegal content (trademark/copyright infringement, slander, libel, child pornography, etc) if they do not comply.

Rackspace is not the problem - the 105th Congress was the problem.