The Joint Committee on the Draft Bill produced a report. I have now read the report. In that report it says:
297. The Home Office knows that not all overseas CSPs will comply with retention notices. It is for this reason that the notices issued under clause 1 may require United Kingdom CSPs to keep third party data traversing their networks. United Kingdom CSPs are rightly very nervous about these provisions. The Home Office has given an oral commitment to United Kingdom CSPs that the Home Secretary will invoke the third party provisions only after the original data holder has been approached and all other avenues have been exhausted. The Home Office has also given a commitment that no CSP will be asked to store or decrypt encrypted third party data. These commitments should be given statutory force.
Note the emboldened penultimate paragraph. I personally don't try to ensure that my mail and internet accesses are encrypted. However, I do deal with people who are "on the run" as a result of nonsensical decisions by the family courts in the UK - I am dealing with quite a few cases at the moment. You cannot trust the state to make rational decisions all the time. Hence giving too much power to the state is dangerous.
It remains, however, that I don't think that modern encryption is that easy to break. I don't think it is practically possible within a sensible timescale without a massive commitment of technology (like all the computers in the world using spare cycles to decrypt one session).
I would think, therefore, that if this bill comes in then practically everyone will ensure that their communications are encrypted. That will mean that there will be almost nothing that isn't. Organisations such as twitter routinely encrypt communications (try typing in http://www.twitter.com and watch it change to https://www.twitter.com). So if that happens then the proportion of data transmissions available to be recorded will go down to something like 5% or even less.
The principle of recording who everyone is talking to all the time is wrong. RIPA already gives quite a few powers to public authorities. I cannot see any benefit to anyone from bringing in a Communications Data Bill anything like the one proposed. In fact I cannot see the benefit of a change in the law to anyone other than vendors of data storage.