PADDs contain only a minimal operating system in their permanent memory. Programs, as well as data, are downloaded from the network as required. The 'net of 2005 is much like the Internet of 1996, just bigger. Predictions of its demise or replacement by a more coherent network were wrong. The Internet expanded, with various transmission technologies and protocols added.
Regulations exist for controlling what is transmitted, but are only enforceable for serious crimes.
Net citizens don't like the potential power the government would have it could achieve real regulation. Citizens guard their right to privacy. In practice this is achieved by the always improving data encryption algorithms developed by the non-profit Zimmermann privacy foundation . Politicians have learnt to be careful about heavy handed attempts at net regulation. Several lost their seats in the 1996 federal election after running a 'computer porn' scare campaign.