Computer Addresses in the Internet
Every computer that wants to exchange data with another computer over the internet needs a unique address. This address is unique across the entire world and could look like the following example:
In the internet, information is transported in small packets which always contain the address of the sender and that of the recipient. The address of the sender is necessary so that the receiving computer knows where to send its responses, even if the response is as simple as, "confirm, packet received".
An eavesdropper only needs to collect the packets from a certain address as they
come by in order to reconstruct the communication correlation and even the contents of the sent information.
Connecting to the Internet by TelephoneMost internet users' computers - usually all those who connect to the internet from home using an analog or ISDN modem or DSL - receive a dynamic IP address from the Internet Service Provider (ISP). That means, that the user gets a different random address from the pool of available addresses of the provider for a given session. The next time the user connects, he most likely gets a different IP Addresss.
In this respect, an eavesdropper or a web server cannot usually uniquely identify a user. On the other hand, the service provider knows and saves the relationship between the user (or at least the user's telephone number) and the IP addresses handed out to users during any given time period. If the service provider and the web server work together, unique identification of the user is possible. This happens in case of a legal prosecution, for example.
The service provider can always observe the user. The provider has access to both personally identifiable information (for example the user's telephone number) and all transferred data.