The NSW Parliamentary Library Research Service has put together a briefing on the government’s filtering proposal which is available to download as a PDF here. It reads:

At this stage, the Rudd Government proposal would restrict blanket mandatory ISP filtering to the illegal RC content, based on the ACMA’s ‘black list’ of prohibited websites. The details are unclear, but it seems adults would be able to ‘opt out’ of the filtering of other levels of ‘prohibited content’, containing material that is either offensive or unsuitable for children.

I must add that RC content is not illegal, unless you’re selling or exhibiting it (or you live in WA or some parts of the NT/ or the content is child pornography). That aside, the report also examines the state of filtering in other countries often used as examples by Senator Conroy.

With the limited exceptions of Germany and Italy, mandatory ISP level filtering is not a feature of any of the countries reviewed. In place, rather, are voluntary ISP filtering schemes designed to prevent accidental access to a defined list of illegal sites containing child pornography. However, in the UK the position seems to be that the internet industry is encouraged to participate in this scheme, under threat of regulatory intervention should it fail to do so. The line between mandatory and voluntary participation is not clear-cut.

The Internet Industry Association clarifies that statement at ZDNet:

…While the authors said that Italy had imposed mandatory filtering, it was “in fact subordinate legislation — not law per se. It gives effect to an agreement that was previously reached by ISPs and the relevant regulator. To that extent, Italy has not enacted mandatory ISP filtering, either.”

The IIA added that Germany’s regulation of search engines was implemented by agreement.