The legislation was passed in early November by the Supreme Council for Cultural Revolution, and is to take effect within six months. It is unclear whether parliament can challenge the bill.

The move has provoked frustration among private ISPs. They claim it will damage private sector growth, lead to job losses and make internet access slower. Some companies claim the Telecommunications Company of Iran (TCI)was instrumental in the legislation, aiming to increase its market share. They also express doubts as to the ability of TCI to handle the high volume of internet traffic in addition to the burgeoning volume of other telecommunications services.

Iranians are logging on in ever-greater numbers. There are an estimated 450,000 users in the country, of which up to 60,000 are paying subscribers, and 100 providers, owned privately and by the state.