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And this is exactly what I'm worried about when MPs raise proposals for a similar system here in the UK.
This sounds way to much like Ameristralia
Except America doesn't have anything like this... yet.
Eh, the american's won't just ban you in their country, they'll ban you worldwide by seizing your domain name.

Even China and North Korea don't try to impose their laws on the rest of the world.

To be fair the US seizes the domain names that it has access to. You won't see ICE seizing .cn domains. It just happens that the most popular domains (.com, .org, .net) are 'local' to the US. China and North Korea don't have the ability to seize those domain names, so we don't know what they would do if they did.
This is increasingly a global problem, not limited to any one country. From what I've observed, most countries are guilty of trampling civil liberties worse by the day, particularly when it comes to censorship and surveillance.

The US, who should be a leader in civil liberties, is inspiring other nations toward copying our abuses (setting a tone of what's acceptable). And we've also been learning from surveillance states like Britain.

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Governments should really learn to stay out their citizens lives.
The Singapore government does that with pornography here. And I built a chrome extension to bypass it (getgom.com). I'd like to do the same for Australia, anyone have an example of the error page when the firewall kicks in?
There's no blocked page. The outgoing connection just inexplicably dies. The block is based on IP addresses, rather than the hostname or DNS poisoning.