In my mind that is almost a rhetorical question because I absolutely believe they do, as do others who have the capability. The legal question, according to this News.com article comes into play with what they might do with it, and perhaps a quirk in the timing that might put cable companies at a disadvantage. With all the talk of privacy these days, this is an interesting topic. Your cable provider might want to monitor your packets to set up their own form of targeted advertising, but it looks like they would be walking into a legal mine field if they do. The article suggests it comes close to "wiretapping." But then, hey, I've always believed that wiretapping in the traditional sense happens whether or not all the legal i's are dotted and t's are crossed.
What's also fascinating about this, is that some of the laws governing the cable industry are so old, (maybe we should say mature) that they actually put them at a disadvantage with their Telco cousins, or with Google, Yahoo, Microsoft, or whomever buys who next.
Timing is everything, I guess.