Every state in the world has its own laws, cultural norms and accepted behaviours. As billions of people come online in the next decade, many will discover a newfound independence that will test these boundaries. Each state will attempt to regulate the internet, and shape it in its own image.

The majority of the world's internet users encounter some form of censorship – also known by the euphemism "filtering" – but what that actually looks like depends on a country's policies and its technological infrastructure. Not all or even most of that filtering is political censorship; progressive countries routinely block a modest number of sites, such as those featuring child pornography.

In some countries, there are several entry points for internet connectivity, and a handful of private telecommunications companies control them (with some regulation). In others, there is only one entry point, a nationalised internet service provider (ISP), through which all traffic flows. Filtering is relatively easy in the latter case, and more difficult in the former.

When technologists began to notice states regulating and projecting influence online, some warned against a "Balkanisation of the internet", whereby national filtering and other restrictions would transform what was once the global internet into a connected series of nation-state networks. The web would fracture and fragment, and soon there would be a "Russian internet" and an "American internet" and so on, all coexisting and sometimes overlapping but, in important ways, separate. Information would largely flow within countries but not across them, due to filtering, language or even just user preference. The process would at first be barely perceptible to users, but it would fossilise over time and ultimately remake the internet.

It's very likely that some version of the above scenario will occur, but the degree to which it does will greatly be determined by what happens in the next decade with newly connected states – which path they choose, whom they emulate and work together with.

The first stage of the process, aggressive and distinctive filtering, is under way. China is the world's most active and enthusiastic filterer of information. Entire platforms that are hugely popular elsewhere in the world – Facebook, Tumblr, Twitter – are blocked by the Chinese government.

On the Chinese internet, you would be unable to find information about politically sensitive topics such as the Tiananmen Square protests, embarrassing information about the Chinese political leadership, the Tibetan rights movement and the Dalai Lama, or content related to human rights, political reform or sovereignty issues.

To the average Chinese user, this censorship is seamless – without prior knowledge of events or ideas, it would appear that they never existed.

China's leadership doesn't hesitate to defend its policies. In a white paper released in 2010, the government calls the internet "a crystallisation of human wisdom" but states that China's "laws and regulations clearly prohibit the spread of information that contains contents subverting state power, undermining national unity [or] infringing upon national honour and interests."

The next stage for many states will be collective editing, states forming communities of interest to edit the web together, based on shared values or geopolitics. For larger states, collaborations will legitimise their filtering efforts and deflect some unwanted attention (the "look, others are doing it too" excuse). For smaller states, alliances along these lines will be a low-cost way to curry favour with bigger players and gain technical skills that they might lack at home.

Collective editing may start with basic cultural agreements and shared antipathies among states, such as what religious minorities they dislike, how they view other parts of the world or what their cultural perspective is on historical figures such as Vladimir Lenin, Mao Zedong or Mustafa Kemal Atatürk.

Larger states are less likely to band together than smaller ones – they already have the technical capabilities – so it will be a fleet of smaller states, pooling their resources, that will find this method useful. If some member countries in the Commonwealth of Independent States (CIS), an association of former Soviet states, became fed up with Moscow's insistence on standardising the Russian language across the region, they could join together to censor all Russian-language content from their national internets and thus limit their citizens' exposure to Russia.

Ideology and religious morals are likely to be the strongest drivers of these collaborations. Imagine if a group of deeply conservative Sunni-majority countries – say, Saudi Arabia, Yemen, Algeria and Mauritania – formed an online alliance and decided to build a "Sunni web". While technically this Sunni web would still be part of the larger internet, it would become the main source of information, news, history and activity for citizens living in these countries. For years, the development and spread of the internet was highly determined by its English-only language standard, but the continued implementation of internationalised domain names (IDN), which allow people to use and access domain names written in non-Roman alphabet characters, is changing this. The creation of a Sunni web – indeed, all nationalised internets – becomes more likely if its users can access a version of the internet in their own language and script.

Within the Sunni web, the internet could be sharia-complicit: e-commerce and e-banking would look different, since no one would be allowed to charge interest; religious police might monitor online speech, working together with domestic law enforcement to report violations; websites with gay or lesbian content would be uniformly blocked; women's movements online might somehow be curtailed; and ethnic and religious minority groups might find themselves closely monitored, restricted or even excluded. In this scenario, how possible it would be for a local tech-savvy citizen to circumvent this internet and reach the global world wide web depends on which country he lived in: Mauritania might not have the desire or capacity to stop him, but Saudi Arabia probably would. If the Mauritanian government became concerned that its users were bypassing the Sunni web, on the other hand, surely one of its new digital partners could help it build higher fences.

There will be some instances where autocratic and democratic nations edit the web together. Such a collaboration will typically happen when a weaker democracy is in a neighbourhood of stronger autocratic states that coerce it to make the same geopolitical compromises online that it makes in the physical world.

For example, Mongolia is a young democracy with an open internet, sandwiched between Russia and China – two large countries with their own unique and restrictive internet policies. The former Mongolian prime minister Sukhbaatar Batbold explained to us that he wants Mongolia, like any country, to have its own identity. This means, he said, it must have good relations with its neighbours to keep them from meddling in Mongolian affairs.

People use the internet in Tehran, Iran, where the government has spoken of creating its own ‘halal internet’. Photograph: Vahid Salemi/AP

A neutral stance of noninterference is more easily sustainable in the physical world. Virtual space significantly complicates this model. People sympathetic to opposition groups and ethnic minorities within China and Russia would look at Mongolia as an excellent place to congregate. Supporters of the Uighurs, Tibetans or Chechen rebels might seek to use Mongolia's internet space as a base from which to mobilise, to wage online campaigns and build virtual movements. If that happened, the Mongolian government would no doubt feel the pressure from China and Russia, not just diplomatically but because its national infrastructure is not built to withstand a cyber assault from either neighbour. Seeking to please its neighbours and preserve its own physical and virtual sovereignty, Mongolia might find it necessary to abide by a Chinese or Russian mandate and filter internet content associated with hot-button issues.

What started as the world wide web will begin to look more like the world itself, full of internal divisions and divergent interests. Some form of visa requirement will emerge on the internet. This could be done quickly and electronically, as a method to contain the flow of information in both directions, requiring that users register and agree to certain conditions to access a country's internet. Citizen engagement, international business operations and investigative reporting will all be seriously affected. This, along with internal restrictions of the internet, suggests a 21st-century equivalent of Japan's famous sakoku ("locked country") policy of near-total isolation enacted in the 17th century.

Some states may implement visa requirements as both a monitoring tool for international visitors and as a revenue-generating exercise – a small fee would be charged upon entering a country's virtual space, even more if one's online activities violated the terms of the visa. Virtual visas would appear in response to security threats related to cyber attacks; if your IP address (the unique number associated with each device on the internet) came from a blacklisted country, you would encounter heightened monitoring.

Under conditions like these, the world will see its first Internet asylum seeker. A dissident who can't live freely under an autocratic Internet and is refused access to other states' Internets will choose to seek physical asylum in another country to gain virtual freedom on its Internet. There could be a form of interim virtual asylum, where the host country would share sophisticated proxy and circumvention tools that would allow the dissident to connect outside.

Virtual asylum will not work, however, if the ultimate escalation occurs: the creation of an alternative domain name system (DNS), or even aggressive and ubiquitous tampering with it to advance state interests. Today, the internet as we know it uses the DNS to match computers and devices to relevant data sources, translating IP addresses (numbers) into readable names, with .edu, .com, .net suffixes, and vice versa. No government has yet achieved an alternative system, but if one succeeded in doing so, it would effectively unplug its population from the global internet and instead offer only a closed, national intranet. In technical terms, this would entail creating a censored gateway between a given country and the rest of the world, so that a human proxy could facilitate external data transmissions when absolutely necessary – for matters involving state resources, for instance.

It's the most extreme version of what technologists call a walled garden. On the internet, a walled garden refers to a browsing environment that controls a user's access to information and services online. (This concept is not limited to discussions of censorship; AOL and CompuServe, internet giants for a time, both started as walled gardens.) For the full effect of disconnection, the government would also instruct the routers to fail to advertise the IP addresses of websites – unlike DNS names, IP addresses are immutably tied to the sites themselves – which would have the effect of putting those websites on a very distant island, utterly unreachable. Whatever content existed on this national network would circulate only internally, trapped like a cluster of bubbles in a computer screen saver, and any attempts to reach users on this network from the outside would meet a hard stop. With the flip of a switch, an entire country would simply disappear from the internet.

This is not as crazy as it sounds. It was first reported in 2011 that the Iranian government's plan to build a "halal internet" was under way, and the regime's December 2012 launch of Mehr, its own version of YouTube with "government-approved videos", demonstrated that it was serious about the project. Details of the plan remained hazy but, according to Iranian government officials, in the first phase the national "clean" internet would exist in tandem with the global internet for Iranians (heavily censored as it is), then it would come to replace the global internet altogether. The government and affiliated institutions would provide the content for the national intranet, either gathering it from the global web and scrubbing it, or creating it manually. All activity on the network would be closely monitored. Iran's head of economic affairs told the country's state-run news agency that they hoped their halal internet would come to replace the web in other Muslim countries, too – at least those with Farsi speakers. Pakistan has pledged to build something similar.

It is possible that Iran's threat is merely a hoax. How exactly the state intends to proceed with this project is unclear both technically and politically. How would it avoid enraging the sizable chunk of its population that has access to the internet? Some believe it would be impossible to fully disconnect Iran from the global internet because of its broad economic reliance on external connections. Others speculate that, if it wasn't able to build an alternative root system, Iran could pioneer a dual-internet model that other repressive states would want to follow. Whichever route Iran chooses, if it is successful in this endeavour, its halal internet would surpass the "great firewall of China" as the single most extreme version of information censorship in history. It would change the internet as we know it.

• Extracted from The New Digital Age: Reshaping the Future of People, Nations and Business by Eric Schmidt and Jared Cohen, to be published by John Murray at £25 on 25 April 2013. © Google Inc and Jared Cohen.