Think of it as farming. You look after the truffle pig or milk cow and get years of productivity. The French understand this, like many other nations, you invest well and use the profits in other countries to build up real infrastructure back in France. Think of it as a farm or colony or investment. The extracted cash flows back one way :)
With the correct use of ads, plans and that new boss feeling the consumers will herd themselves for free enjoying freedoms, good value and choice.

It gets expensive. You have to find an ip thats not yours every time. Late night you slip up just once and the resulting filtering, sorting will find you.
Add in the use of encryption or other acts will make the gov track all strange packets they find. The more they have to look, the more time and cash will flow until the reason why a person wanted anonymity or used encryption is uncovered.
A person would have to change all their computer hardware, software, never visit the same sites as their legal account, never use the same methods, slang, names, country - perfectly, every time they wanted anonymity. After a few years that gets to be a skill. The gov contractors and mercenaries have years to wait for that one slip up.
Also the people around you might have been turned many years ago when they slipped up one night.
It also depends on the other ip you use. If the account just looks at golf and work, to see the same 'persons' ip suddenly use encryption could be easily noted.
Lists go both ways, the normal to find stand out events and the users of encryption.

Re "So, what are you going to use for ID? "
If you cant get a national ID system passed into law you do what Australia did after ideas around the Australia Card https://en.wikipedia.org/wiki/... failed (~1985 abandoned in 1987.).
A gov can demand a linked list of different types of ID to create a life story from gov issued paper work and gov databases.
In the end you have something like the 100 point check https://en.wikipedia.org/wiki/... for cell phones, banking, interacting with gov services.
No need for any national cards or huge changes. You just have to have the kind of documents any 'real' person would have: birth Certificate or passport, licence, id or permit or name and address documents. A selection of documents to build into a final legal profile.
What you had to show to open a bank account or get a cell phone could be requested by your internet provider and linked with every ip change to your account.
Even better, encode an isp issued like coaxial cable box just for 'you'.

" We only need to expose the criminals, not everybody else."
The problem with that is the scope of who gets to see the ip, persons address and how to flag the online activity.
What if a local political leader is seen using a tax payer funded car for personal use?
Say a staff member tips of the local press via online communications? That local political leader could then unmask the origin of the story using a simple legal data request made to look like a local gov was tracking a "criminal".
An automated database and form summited would not know it was the press or the staff member was the result as long as the right local gov clearance was used.

Dianne Feinstein statement on CIA torture report 'cover-up' Ã" full text (12 March 2014)
http://www.theguardian.com/wor...
"wading through the horrible details of a CIA program that never, never, never should have existed."
Feinstein accuses CIA of 'intimidating' Senate staff over torture report (12 March 2014)
http://www.theguardian.com/wor...
The problem is the issues go back to many, many years. Vital information was not passed on to the FBI about the movements of bad people into the USA.
Later after an event the FBI was then given files showing that same vital information existed via US gov staff in another country.
At a later date interrogations took place in a 3rd country. The FBI used wise open court interrogation skills that got a person to talk so a real US trial could be held. The CIA and their medial staff had a free pass to try torture. The FBI got results. The CIA got to try torture.
The CIA was in change of the site and communications. The CIA passed the results back. For years the upper levels of the US gov really, really wanted to hint that CIA got real results, so did the press with contacts and sockpuppets.
The problem for the CIA is the first hidden paper trail, the promotions that have been allowed over not sharing information with the FBI and then FBI interrogation results issues.
Kind of not so easy to tell the US public, press many years later.

Re The national ISPs would host their own root.
Yes nations would just go for a version of the classic Minitel https://en.wikipedia.org/wiki/... with a nice web 2.0 feel.
Other nations would then set up their own networks understanding they could be 'next'.

Two multinational telecommunications brands and a Linux distribution vs a PRISM?
Like many nations, best to go with your own staff, code, hardware and software long term. Too many eyes with the costly imports.

Re 'being used as a scapegoat here"
If the encryption is weak and is shared with a few govs its better for China to walk away from all tame US products and start again withe their own code and software solutions.

Every encrypted use of the internet to and from the US would be of interest.
All the layers and data about the 'safe' encrypted message would be kept. Just using encryption would ensure further investigation and long term logging.
The consumer hardware is connected to a very tame 'internet', with tame telcos, tame VPN providers, tame crypto providers and issues like the Communications Assistance for Law Enforcement Act
https://en.wikipedia.org/wiki/Communications_Assistance_for_Law_Enforcement_Act
The network as provided is fully open to the gov. Use a tame consumer OS or more interesting OS, your packets still flow and a few govs work very hard to collect all.
The advice that can be given by some top ex US mil/gov official is the low cost of hardware for ex gov staff and former gov staff now working for 'other' global banking competitors.
A lot of ex gov staff around the world know how telco and banking systems work and are for hire. What was once "five eyes" with shared bases global expensive is now banking sector affordable. Everybody now has the ability to buy some telco sector insight.
What can be done re consumer hardware? You have to walk, drive, fly to your bank and work out what product is best for you face to face.
Too many groups, people, ex staff, former staff have the same insights into networks. eg identify US unreported offshore accounts? Just watch people in the US logging into 'encrypted' super secret offshore accounts via that US telco as they look at statements, move cash around.
That unique ip/encryption stream would stand out. Over time all a bank needs to report is dual citizens and people on holiday. Everybody of interest is safe, meeting face to face with correct paper work :)

People can work out a vast complex network exists. All that national spread of small factory complexes with just in time delivery and payment.
Add in a tail end network thats waiting on international parts delivery.
So they find their way onto trusted systems and go for the main complex.
Finding a way in they use skill and poor design to transfer out 'plans'.
Some time later they spend big trying to make the plans work. Their own well funded lab comes back empty. Something is wrong, missing or it was never a real project.
To make the above work you need a vast amount of tame press telling the world about sloppy code, successful intrusions, countries getting away with decades of digital design over a few short years.
At a lower level its all about vendor lock in, ensuring the sale of that next version and then chasing the intrusion clean up work.
Systems are open to the net for a reason - as bait or to rent seek clean up contracts.

Re"still maintain these ICBMs" is the key. Generations now expect a good paying job working on 1960's-90's tech for decades at a security level and gov pay grade.
Overtime they have turned that some of that gov pay grade into contractor positions.
The staff then have car, house, debt, hobbies - ie totally locked into the shareholder military industrial complex. Just as profiled for the position.
Thats a lot of contractor boondoggle and maintenance rent seeking over decades too. Kind of hard for the political class not to accept huge donations over many terms.
The systems stay, the workers stay, the staff stay, the profits are locked in and expected every year over generations.

They have a fence around the site and the hatch system is secure. The electronic code system would have only been been seen by a few people to give the right code to the right site at the right time (one time pad).
The older staff would have worked out every control panel and lockout device due to boring mission hours and skills.
So you need the code sent in, a few people to send the code, more than 1 person to turn the key/get launch site ready.
The main issue is if the entire command falls under the influence of a faith based cult.
Lets hope the contractors who run the medical tests on the staff look for changes in the basic personality types used at the sites.
Other people would have the mission to track all staff off base 24/7 - phones, reading material, net use, new friends.

The gov cares as the pay TV monopoly zones see having their wealth protected from all other providers.
You pay for months of pay tv to enjoy a new show per season. You dont get to enjoy each show from another nations computer company in near real time.
So expect to see a lot of pay tv efforts locally and internationally to protect each networked thiefdom .

Yes with the flow of cash old and new laws become an option. So you have a rush to set all aspects of streaming, p2p, downloading to a cash "moving" criminal legal standing.

Over time you link banner in with a cookie, flash cookie and database cookie folders.
ie as with the first gen flash cookies you get a a unique ID and can be tracked online for a while.
What was once online marketing activities in 100KB deep in a browser is now todays police work.