After talking to a few different people about it... I've pretty much decided that I'm going to give it another 1-2 days to see if he keeps it up even after I've blocked his laptop from internet access. If he keeps it up, I'll take it to our HR person with whom I'm working on an Internet Use policy with. Yup, we have no internet use policy at my company, yet another thing that my illustrious predecessors never did. I thought we had one until I was informed otherwise yesterday.
If he stops, then I'll plan on sending an internet use e-mail out and explain that I'm monitoring our internet usage to track down why our connection has been incredibly slow.
I'm pretty sure it's been going on for a really long time with this guy, seeing as how we've had these internet speed issues for a long time. I attributed them to normal business traffic, as we have a lot of files that customers send to us and that we send to them. At the very least, he's got a very serious problem that he needs to get taken care of. I don't like being the bad guy, but he's affecting business communications, and I simply can't have that. I've gotten 3 other people fired at my previous job for looking at porn at work, but this is a bit harder because I didn't actually work in the same office as any of them. I see this guy every day, have met his wife and kids, and would hate to see him get fired... but maybe that's the wake up call that he needs. He's already been under scrutiny for not getting his work done in a timely fashion, and it looks like I know why now.