InternetNZ says it objects to the government wanting to put a legal framework around creating a nationwide web filter on objectionable material.
A Bill was introduced to Parliament on 26 May after Cabinet agreed in December last year to policy proposals to amend the Films, Videos, and Publications Classification Act 1993.
It would amend the Act to expand scope to social media sites, make objectionable content a criminal offence, allow government to issue take down notices, and permits the chief censor to fast-track public notices on such content.
In addition, there will be further consultation on putting in place legal framework for a web filter to block objectionable content.
Objectionable content is that which harms the public good, including depictions of torture, sexual violence, child sexual abuse, or terrorism.
However, InternetNZ chief executive Jordan Carter told Morning Report while the Bill had good aspects to it, it did not have the rights protections that they would like to see.
"For the first time it makes it really clear that doing the kind of livestreaming that the Christchurch terrorist did will be illegal - it will be an offence, it gives the government the power to takedown some material like that and imposes fines, and it speeds up the chief censor's decision-making, so those are all good things.
"But then it has a big sledgehammer in it to crack the nut of this content with a very broad power to introduce a web filter with no real constraints whether it's voluntary or compulsory."
Carter said filtering should happen in the same way it did with the child abuse material, with a opt-in filter option that Internet Service Providers (ISPs) would pick up.
So filters for objectionable material could be added, without the need for a legal framework, he said.
"It's just that it's not needed, so why do it? Why create the option? Why create that power?
"And it's not going to help deal with the problem of online content, because the government can provide a filtering service to ISPs without this legislation. So it's a step too far that shouldn't be taken right now, and it actually takes away from the other good stuff that's in this Bill."
"There's a comfort in having the law setting out these kind of powers, but the problem with it is that it means it's a legal mandated requirement and we don't think the government should have that role on the internet."
Filters sometimes stop people inadvertently seeing some content. However, Carter said examples from around the world of governments inducing web filters showed they could end up either over-blocking or under-blocking content.
"It's a pretty mixed picture ... opt-in ones are fine, and commercial solutions make sense as well. But the challenge is do you want to give government the power in law to decide what should and shouldn't be filtered? And our principle and practical answer to that is we shouldn't."
Big social media sites, like Facebook, tended to have rules that would take down content that would come under this law anyway, he said. As for fringe websites that host such content, Carter said this Bill would make that behaviour illegal, and that was the good part of the legislation.
In a statement this week, Internal Affairs Minister Tracey Martin said the bill targeted the spread of harmful and illegal content online.
"Our laws need to reflect the digital age and the government has worked with industry partners to create this Bill, which will ensure law enforcement and industry partners can rapidly prevent and fight harm from illegal online content."
"This Bill is part of a wider government programme to address violent extremism," Martin said.
"This is about protecting New Zealanders from harmful content they can be exposed to on their everyday social media feeds."
Martin said the legislation supported commitments under the Christchurch Call, and would complement extra funding announced last year for the department to help counter violent extremist content online.
The Bill will go through the select committee for public submissions. If passed, most changes will come into effect in mid-2021.