Your ISP can see everything you do and see what websites you visit and what you're downloading.
Even if you use a VPN to hide your IP address from websites your ISP still knows your current IP address and can see that you're using a VPN.
Still most ISP's do not care what you're downloading or what websites you're visiting so long as you're not doing something completely illegal.
Your ISP would only likely look at your internet history and download history if you start using way too much data at a time or if the police force the ISP to get your internet history for them.
Other than that ISP's do not have enough time or the manpower to watch every single users internet history and internet downloads.
So yes your ISP has ways to see what you download and what websites you visit but they really don't care and do not look at it unless they're required too.