Just out of interest, If Telstra flat out refused to co-operate with the government on this, as they "own" the lines in Australia as far as I know (not very far mind you) would the government have no choice but to back down?
Actually, shouldn't the "line" and "tower" owners be forced to properly ensure that their equipment isn't being used to mule illegal material/data/information around and in and out of the country ?
No need for "The Government" to pay the pretty penny associated with the "nnn" system ("National Net Nanny", acronym © derspatz 2008 :)) if they instead enforce the appropriate laws properly.
In fact there is quite a lot of money OUR Government can make from off privatised telco systems who fail to properly supervise and moderate their systems.
Time we make Telstra responsible for this sort of thing – after it is completely sold off that is.
While The/Our Government are busy doing that, why don't the rest of us get busy setting up city wide packet forwarding short-hop wireless networks using any/every machine available in the vicinity that can be convinced to come on board, and encrypted inter-town/city/state data links, etc, and leave most of the old internut behind like part of a staged rocket left to burn up in the atmosphere after doing its job ? ;)
regarDS