The new "guilt by accusation" law would result in internet service providers (ISPs) being forced to take on the role of gatekeeper by blocking online access to anyone accused of flouting copyright laws and illegally downloading films and music.
Telecom, Vodafone and TelstraClear have spoken out against the law, joining calls by Internet NZ for the Government to repeal section 92A of the Copyright Act, due to come in on February 28.
The law says ISPs must disconnect internet service to anyone "repeatedly accused" of accessing copyrighted material online.
Communications and Information Technology Minister Steven Joyce acknowledged concerns about the law's implementation, but stopped short of saying it would be reviewed.
"We will keep a close eye on how the new law works in practice. We are prepared to look at further changes if they prove necessary."
Internet NZ executive director Keith Davidson said ISPs would play the role of "judge, jury and executioner", and the law would negate the assumption that users were innocent until proven guilty.
He said he believed an alternative model used in Canada and Japan by which people who believed their copyright was being infringed were put in touch with the alleged perpetrator, would provide a better solution.
"Internet service providers shouldn't step in and become middlemen. We are a democracy ... it goes against having an open and uncapturable internet."
Vodafone spokeswoman Alison Sykora said: "We believe the Government needs to re-examine this as it would be extremely difficult, if not impossible, to enforce."
TelstraClear spokesman Mathew Bolland called the legislation appalling and said it appeared to have gone through "in the dead of the night" despite the commerce select committee deleting the controversial section last year.
"We won't break the law, but we won't be hammering our customers."
Telecom spokesman Mark Watts said the company did not believe section 92 in its present form was the best solution.
"It should not fall to ISPs to monitor our customers' behaviour or decide whether infringement has occurred."
- The Dominion Post