The DMCA act is readable; read it.
Effectively, all it does is offer safe harbor for an ISP, with ISP loosely defined.
Congress attempts to offers a pseudo mediation framework to limit/remove liability from the ISP for the acts of its users.
If the ISP complies with the DMCA, the ISP is immune from liability for copyright infringement.
Here's the part the ignorant ignore:
If the target of a DMCA notice sends a COUNTER-NOTICE, the ISP will/must/should put their stuff , else the ISP can be liable for taking it down without case.
Read the DMCA, it's fairly short as these things go.
http://www.copyright.gov/legislation/dmca.pdf
Disclosure: I spent $80k on attorneys defending against a nuisance lawsuit and used the DMCA as a shield.
Under copyright law, distributing copies of someone's protected work without authorization is illegal. Many types of internet service providers, as part of fulfilling the service they offer, distribute copies of works on behalf of others. Web hosts serve files their customers have uploaded, video sites stream user uploads, discussion boards serve messages written by users, etc. Thus, an ISP may come to unknowingly distribute copyrighted works without authorization, and would be subject to lawsuits for doing so.
The DMCA offers a way for these ISPs to avoid being sued despite having indeed infringed someone's exclusive rights under copyright law. If they register an agent with the copyright office, and follow a procedure for disabling and re-enabling access to materials they distribute based on certain notices, they then cannot be sued for having hosted that specific material in the past.
The DMCA does not require that anyone register an agent and follow those procedures, it only offers a benefit if you choose to do so.