08/28/2013 03:01 EDT | Updated 10/28/2013 05:12 EDT

NDP's telecom hearings proposal nixed

A House of Commons committee has voted down a proposal by the Opposition NDP to hold hearings on rules governing the wireless industry in the midst of a fevered public debate about Canadian telecommunications.

The NDP had called on the standing committee on industry, science and technology to hold hearings on the January 2014 auction of radio-wave spectrum after Canada's big three telecom companies complained that Ottawa's rules for the auction favour U.S. telecoms giant Verizon.

Verizon is rumoured to be considering entering the Canadian market by either buying up smaller players like Wind or Mobilicity or bidding on spectrum itself.

Bell, Telus and Rogers have asked the government to loosen the auction rules to allow them to bid on blocks of spectrum reserved for new entrants and smaller players like Wind and Mobilicity and to give them an equal shot at purchasing smaller competitors.

NDP industry critic Chris Charlton said consumers are concerned about pricing, access and security of cellular phone services, and she urged the government to have an "open debate" about the issue.

As the large players in the industry continue to lobby for what they call a more level playing field in the upcoming spectrum auction, Industry Minister James Moore has been clarifying the government position in speeches about telecoms across Canada .

But the Conservative-dominated industry committee, recalled at NDP insistence, turned down the request for the hearings.

U.S. tightening telecoms rules

The decision comes amid news that the U.S. is tightening its grip on its own telecoms industry because of security concerns.

The Wall Street Journal reported Wednesday on the increasingly restrictive security agreements between U.S. telecom companies and national-security agencies geared at protecting strategically significant networks.

The paper revealed that over the past 20 years, foreign companies that have bought into U.S. telecom firms have had to enter into agreements that compel them to grant government security agencies access to information on their networks.

In recent years, the reach of the agreements has been widening and they have begun to also affect the companies that supply equipment to the U.S. telecom network, with the government actively discouraging purchases of equipment made in China because of alleged security concerns.

Verizon signed such an agreement in 2000, when it sold a stake to Vodafone PLC, the WSJ reported. Other U.S. wireless companies that have been affected by such arrangements are Sprint Corp, partly owned by Japan’s SoftBank Corp., and T-Mobile USA, which merged with MetroPCS.

The deals routinely require the companies to give the National Security Agency streamlined access to their networks. NSA whistleblower Edward Snowden exposed the extent to which security agencies listen in on U.S. telecommunications feeds earlier this year.

There is also growing concern in the U.S. over telecoms equipment made in China, which officials fear could be used by Chinese spies to pry into U.S. affairs. The head of the powerful U.S. Intelligence Committee last year urged Canadian companies not to do business with the Chinese telecommunications giant Huawei as a matter of national security.

The Communications, Energy and Paperworkers Union of Canada, which represents Canadian workers in the industry, has expressed concern over national security if Verizon enters the Canadian market.