Its totally possible.
https://en.wikipedia.org/wiki/DNS_hijacking#Manipulation_by_ISPs
A number of consumer ISPs such as 'Telstra (Bigpond)' use DNS hijacking for their own purposes, such as displaying advertisements or collecting statistics.
That is just one mechanism for influencing what website you are connecting to..
In using the Telstra's DNS you are trusting them to resolve the IP of the website.
WEBSITE?, page-36
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