Meloni accused the government of using the scheme to buy political favour from Family First Senator Steve Fielding.

Fielding and The Australian Family Association has lobbied Conroy to add a grey list of other objectionable materials, including pro anorexia sites, to the filter.

A director of a small Sydney-based ISP, who requested anonymity, said the move is "grossly political" and accused the government of creating "another Harradine" in the Senate.

"Labor needs Fielding's support to pass legislation if it's opposed by the [Coalition]," he said.

"It's bloody obvious who's pulling the strings."

He said government content filtering will financially ruin small ISPs.

"I'll pack up and join the picket line at Canberra the minute this thing comes in - it will destroy our livelihoods and for what?"

Director of an Albury-based ISP Ross Wheeler said the plan will hit the wallets of ISPs and cosumers.

"I have no doubt, absolutely no doubt, that this will come straight out of the pockets of consumers and will sink small ISPs."

He said Internet content filtering is impossible in Australia because of network configurations.

"If the government came to me and said you must filter this data, I couldn't do it," Wheeler said.

"It would be technically doable if this happened three years ago when we provided all of our own infrastructure, but it's too late."

Under the current network model, ISPs effectively do not have access to customer data as it is bypassed through resold services and infrastructure owned by larger providers such as Optus and Telstra.

Filtering is also impossible for infrastructure owners because customer data is encrypted before it enters their systems.

"Smaller ISPs effectively only provide authentication for end-user data. The [service] is terminated on someone's NAS (Network Access Server) so the smaller ISPs never see the customer data and there is no mechanism for interception or filtering," Wheeler said.

"The data from the DSLAM is encrypted end-to-end over the wholesaler LNS (Layer 2 Tunneling Protocol Network Server)."

ISPs level filters must identify data sourced from multiple global locations through multiple wholesaler providers.

Data identification is impossible, according to respondents, because a single image can be composed of fragmented data routed through infrastructure owned by Optus, Telstra and PIPE.