The enhanced router would be sold to ISPs and will automatically insert your ZIP+4 into HTML headers. This will allow marketers to have much more accurate information about the user's physical location.
They claim that the "consumer is not in any way stripped of their privacy" but fail to actually explain how that is the case. The point is for ISPs to get a piece of the advertising pie. The ZIP will be encoded, not sent in the clear, but will be available to some undefined set of "trusted third parties". That does not give me much comfort.
I have seen many examples of websites which charge different prices based on where you live, or otherwise restrict access to web pages. This kind of targeting does not help me at all. If I want to be located, I have many ways of explicitly telling the site where I am.
This is another example of why you can't trust your ISP. Their interests are not the same as yours. They have a strong incentive to track and monetize your activity.
Fortunately it is easy to take back control. If your traffic is encrypted within a VPN, then the ISP will be unable to insert this information. It gives you the absolute ability to enforce your own "opt out" even if the ISP does not want to give you the option. Anonymizer Universal(TM) provides an easy tool to accomplish this.