This is what the SAFE Act requires: Anyone providing an "electronic communication service" or "remote computing service" to the public who learns about the transmission or storage of information about certain illegal activities or an illegal image must (a) register their name, mailing address, phone number, and fax number with the National Center for Missing and Exploited Children's "CyberTipline" and (b) "make a report" to the CyberTipline that (c) must include any information about the person or Internet address behind the suspect activity and (d) the illegal images themselves. (By the way, "electronic communications service" and "remote computing service" providers already have some reporting requirements under existing law too.)
The definition of which images qualify as illegal is expansive. It includes obvious child pornography, meaning photographs and videos of children being molested. But it also includes photographs of fully clothed minors in overly "lascivious" poses, and certain obscene visual depictions including a "drawing, cartoon, sculpture, or painting." (Yes, that covers the subset of anime called hentai).
First off, it's only the house. Still has to pass the Senate and get signed by the President. Second, it reads as if it only applies to those providing a public service as a transport as well as targeted websites (like social networking and bulk free emailers).
Joe Blow's everyday website would be immune as would hosting providers since they aren't transient by nature and aren't a public offering. ISPs get hit because they are transient and public services are moved across their networks.
The idea, unfortunately, is flawed and the implementation is worse. I suspect that a lot of people will be lobbying their Senators to take a closer look at this. The problem is the "obscene" statement. I agree that kiddy porn is an abomination but if you recall, at one time 2 Live Crew's lyrics were also considered obscene. There's not a valid litmus test for what's obscene. Take anime. The Supreme Court had struck down a law talking about cartoons depicting children because no harm was being done to any living children or something of that nature. I'm too lazy to look it up. So the law would conflict with an existing ruling and thus, have to be revised or struck down.