Another vote from me for the #2 option; use ISP-supplied router in modem-only mode and pipe 'tinterweb' through to your own router.
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2010 B8 S5 Sportback quattro 3.0 Supercharged in Sprint Blue (current girlfriend)
2000 D2 A8L quattro 4.2 in Audi silver (my ex-girlfriend)
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