Uh ... kiddies.
"traceroute" does not, contrary to popular belief, give you access to the addresses of all the machines between you and destination.
It only gives you the addresses of the TCP/IP machines between you and destination.
Most telco gear encapsulates TCP/IP over a completely different protocol, and TCP/IP isn't capable of even interacting with the protocol that encapsulates it.
On the other hand, most of that telco gear allows "sampling" of the bitstream, without the enduser actually having any way of noticing that the sampling is occurring. Hint: ones & zeros can be duplicated without loss. That's how fiber optic repeaters revolutionized long-distance telephony. The included "monitor" ports on the repeaters (ostensibly used only for test purposes) also allow anyone with access to listen in ...
In other words, if you have access to digital $TELCO_SWITCH_GEAR, you can listen in to any internet traffic, without anyone only connected to the TCP/IP internet being the any the wiser.
My point? If the New Zealand Governmental Spy Agency doesn't grok this basic concept, and actually allowed ping times to increase due to their snooping, they need to be fired en-mass, regardless of what the Dotcom twat is guilty of.