I work for one of the top three telecoms and this is true. Basically there is a logging configuration on all of our layer 3 switches (and other higher level nodes) which backs up all the metadata about packets which pass through to a server that only the government has access too. Theoretically the government never looks at any of it unless they get a specific warrant, but they have the keys to it so I'm not sure who is holding them accountable.

That said it's a massive amount information that by my understanding only contains transactional info. In other words it says this guy exchanged some packets with this guy. I sincerely doubt the default configuration backs up the actual packets which are passed, that would require a monumental amount of storage space and additional processing power. Even if that's so, most data is encrypted. While encryption can eventually be broken there is no way all encrypted data can be. It would have to be highly targeted simply because the resources don't exist to look at everything.

But if they really wanted to look at what a specific person was doing it wouldn't be difficult. Everything is already in place, they just have pull the data.