In most parts of the world, everyone uses the government ISP already. That's a given.
This software is installed in an ISP that's beyond the control of the censors. I don't think Merit Network or the University of Colorado are going to worry much about whether they or their users are breaking the network laws of some random country halfway around the world.
TFA (well, the second one, the USENIX paper) makes it clear that there are already two ISPs running this software.
Not a tier-1 ISP, granted, but MERIT carries a pretty large chunk of the traffic in and out of the Midwest. It's a start.
TFA doesn't provide much technical info, but the papers it links to explain this in some detail.
In a nutshell, crypto and steganography: using the public key of the system, the client hides a signal in a TLS connection, which the TapDance station can recognize because it knows the private key. If you don't know the private key, the TLS connection looks like an ordinary stream of encrypted TLS records. In fact, it is a valid TLS connection, so the server doesn't think anything is weird about it either.
USENIX used to be one of my favorite conferences. Important work was presented there. Or at least work that, at the time, seemed like it had the potential to be important, although no program committee has yet been perfect at foreseeing the future...
This just seems like a silly joke taken too far.
Good grief, we know this is Slashdot so reading TFA is generally scoffed at, but at least read past the first sentence of a summary. The Subject of my post says it all. It is trivial to set up a proxy so that customer => Cloud service which can't be blocked => TOR.
You wrote that a proxies "aren't really necessary". I was responding to that. Good grief, indeed.
If you'd like to move the goalposts by claiming that the summary isn't want you wrote, that's fine. I'll respond to your claim that proxies are easy to set up. Yes, they are. And they're really easy to block too, if someone is motivated to do so. If they weren't difficult to block, there would be laws in place that would make them harder to set up.
The TLS handshake passes the name of the host being connected to (for the purpose of fetching its certificate) in plaintext. So if a site isn't being blocked, it's just a matter of time before the ISPs close this trivial loophole.
The next step is to ask for a different certificate that is being used on the same IP, by hacking the TLS handshake to specify a different hostname in the handshake than it uses in the HTTP request it sends later. This will probably just annoy whoever ends up paying for the bandwidth, and the loophole will get closed eventually.
"The voters have spoken, the bastards..." -- unknown