WHOA whoa whoa, I think there's a lot of overreacting going on. When I was in high school, I did pretty much the same thing, exactly when there were only 3 big MMOs (Everquest, Ultima Online, and Asheron's Call - I chose the third). My parents did the same thing, were worried that I spent too much time on the computer, etc. You want to know something though? Despite my hardcore addiction (easily 50-60 hours a week), I was still a straight A student, starred in several plays, and obtained a full-ride to an in-state university. Eventually I kicked the habit on my own because I no longer felt like paying a monthly fee for games (in actuality my parents paid for it each month, so I sold my character and gave them the profit, which came out to them earning about $20).
The difference was my parents never threatened to send me to a counselor. That's essentially the same as saying you need to see a psychiatrist, which I'd consider an attack against my mental health if I were a teenager. Considering the addiction, it's not such a surprise that your brother threatened suicide. However, realize that these types of addictions **usually** pass depending on how intelligent the user is.
Is your brother a good student? Has he been falling behind in his grades? He's 17, is he prepared for college? You need to find out a lot more information before you can decide if drastic measures need to be taken. Doing pretty much anything is seen by him as an attack against his privacy and an attempt at just making him miserable.
Forty hours a week really isn't much, he's an unemployed high school student. If all he wants to do is play WoW and it doesn't effect his health or his studies, then I don't see the harm. If he starts staying up all night playing the game or skipping meals, skipping homework, skipping responsibilities, etc., then I'd suggest cutting him off because he can't manage his addiction.
Seriously, chances are he'll get bored with the game after awhile. I'm afraid interfering and alienating him with disciplinary action for doing nothing more than playing a game may turn him into another case of a kid walking into a cyber cafe and playing until he drops dead.