Last time I checked, "fascist states" like China and North Korea had no problem regulating content on the internet (the ongoing Cisco fiasco, the Yahoo debacle in China, etc.). For that matter, organizations like the MPAA and RIAA don't even have a big problem regulating content on the internet here in North America, with the help of the U.S. gov't. The problem isn't so much one of controlling content, it's the problem of controlling tax bases and influencing the future direction of the internet. And like it or not, the future direction of the internet is going to involve surveillance and lots of it from every possible government. The tax base problem is already being faced by low-tax regimes that allow international corporations to incorporate in their jurisdiction but lack the connectivity to make an online business viable there. So businesses (now mainly online gaming and porn) deal with a North American or European hosting company, but are incroporated in a low tax jurisdiction in the Carribean, which puts them into a legal gray area for taxation purposes. Are they doing business in the Caymans where they are incorporated, or in Texas, where their servers are hosted? Although some laws exist to address this, most countries still see this as a source of tax leakage. And the two things that really get governments riled up are not being able to collect taxes and not being able to spy on people.