I realize that it's a much smaller, and MUCH richer country than ours, but Singapore already does this. There, you have a choice: Use the free Gov't access, choose a different provider (or tether), or do some combination of both.
Done right, this could simply be another competitor in what will soon be a crowded field. Obviously, there's going to be some mistrust of how the gov't will use the collected data, but I would guess that the majority of people don't care enough about how (or are ignorant to the fact that) the government is going to use the tracking data for it to be anything other than a minor news story if this moves forward.
My 2 bytes.