Think of the internet like a mail system. If you want to communicate, you need a destination address, and a source address so they can send the information back. So your computer has to sent out a request: “Hey, I need information from www.google.com.” While the contents of the message is almost always encrypted and unknown to the ISP, the ISP HAS TO know the address because it has to know where to route it to to “deliver the letter.”
So all it has to do to block traffic to other sites is say, “Route information going to and from www.google.com. Drop all other requests.”
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