Australia's third-largest internet service provider (ISP) iiNet has predicted that it will have to charge an extra AU$5 for every product it has in order to comply with the government's proposal to log two years' worth of customer data.

iiNet's chief regulatory officer Steve Dalby and chief technology officer John Lindsay spoke before the Joint Parliamentary Committee on Security and Intelligence yesterday, at a hearing on the government's proposed telecommunications-interception legislative changes .

Dalby pointed out to the committee that Attorney-General Nicola Roxon's letter to the committee includes the destination of communication among the types of data that the government would like ISPs to retain — which could be interpreted as IP addresses of websites that customers are attempting to visit.

According to Dalby, iiNet customers visit around 1 million URLs per second. In order to store all of this for two years, he said that iiNet would need 20,000TB of storage. He estimated that to get set up, iiNet would need AU$20 million worth of IT equipment and an AU$10 million datacentre to store the data. Ongoing monthly costs would amount to AU$1 million, including the need for additional storage as the amount of data going across networks increases.

Dalby said that ISPs "not only will be intelligence agents of the state, but also additional tax collectors" for the new data-retention tax.

"We will recover the cost of law enforcement on behalf of the Commonwealth," he said.

Dalby said that an "unsophisticated estimate" of the cost that would be passed on to customers is around AU$5 per month.

The telecommunications industry as a whole has estimated that it would cost between AU$500 million and AU$700 million to set up the systems for data retention, while Telstra has said that it would cost several million dollars to even scope out the sort of data that would be required by law-enforcement agencies .

A running question put to opponents of the proposal was whether the collection of this data could prevent a "9/11 in Australia." Dalby said that iiNet complies with requests from law-enforcement agencies already, but there is no proof that the collection of metadata would stop terrorist attacks.

"There has been no identified or advised massive failure that warrants gathering all data on all people all the time," he said. "That's a very hypothetical question; there is no conclusion that gathering this data would stop [another] 9/11."