Texts sent on a cellphone are subject to surveillance under Canadian law, but there must be a court warrant. (Reuters)

Wireless carriers in Canada, including those bidding on a block of prime spectrum tomorrow, must agree to allow police and Canadian securities agencies to monitor suspects through their networks as a condition of licence.

The first bids are due tomorrow on four blocks of Canadian spectrum that will help wireless carriers improve broadband access across the country.

Some Canadians hope that a fourth competitor emerges from the auction process to challenge the big three Canadian telecoms – Bell, Rogers and Telus. The results of the first round of bidding will be released Sept. 23.

There has been little scrutiny on the surveillance rules bidders must agree to.

As with past public spectrum auctions, each carrier must allow  “interception capabilities as authorized by law” as a condition of their access to bandwidth, according to rules outlined on the Industry Canada website. That rule has applied in every spectrum auction since 1996.

Edward Snowden revealed earlier this year that the U.S. National Securities Agency had a secret order permitting it to listen in on phone, wireless and internet communications involving millions of Americans. Vodafone, AT&T, Sprint and other big carriers admitted to co-operating with the NSA.

But  the conditions imposed on Canadian carriers are narrower, as there must be a warrant for each instance in which law authorities listen in to Canadian wireless communications.

The rules are meant to compel the wireless carriers to help police pursue suspects by monitoring wireless conversations, reading SMS texts or tracking a users’ whereabouts.

The expectations are spelled out in a 1995 law called the Solicitor General's enforcement Standards for Lawful Interception of Telecommunications, which specifies the need for a court-approved warrant. 

In 2005, the government drafted a bill that would have extended the same demand to internet service providers and other telecom-related services. That bill also would have eliminated the need for a warrant, but it died without being passed.

However, Public Safety Canada, which oversees surveillance, has said it wants to broaden the conditions that must apply for lawful interception.

For Canadian users, the greater threat to privacy is where their communications are routed over U.S. networks, as the NSA has carte blanche to listen in on any communications from foreign sources.

The auction of 700 megahertz spectrum could raise a lot of cash for the federal government.

These radio waves have the ability to allow cellphone signals to reach into elevators, deep into underground parking lots, traffic tunnels and basements where calls are often dropped. The signal can also travel greater distances and, in rural Canada, will require fewer cellphone towers to provide coverage. This new spectrum also will help meet consumers' growing smartphone and tablet use. 

"This is really prime real estate and there is a limited amount," said analyst Brahm Eiley of the Convergence Consulting Group. "That's why the price for this stuff is going to be very high."

The last auction in 2008 raised $4.3 billion and brought new players Wind Mobile, Mobilicity, Public Mobile, Eastlink and Quebecor's Videotron to the wireless market.

It is not known whether foreign wireless carriers will bid in tomorrow’s auction. Many Canadians were disappointed when U.S.-based Verizon opted to buy out its own stock and stated it had no interest in the Canadian market. 

IDC telecom analyst Lawrence Surtees thinks it's unlikely that any other foreign bidders will decide to take on the Canadian market.

"I think a number of foreign players might look at the Verizon decision to think about testing the wireless market here and then balking as a signal that the Canadian market — it’s not that it’s saturated — but we have three big strong guys and whole bunch of newcomers," he told CBC's Lang & O'Leary Exchange.

Surtees said he believes it is critical for Wind to pick up a large block of spectrum and become a national player. The startup company has a rough few years in the Canadian market and buying spectrum is critical for its long-term viability, he said.