08/13/2013 05:13 EDT | Updated 10/13/2013 05:12 EDT

Will Verizon Spy on Canadians, Too?

If Verizon Communications takes over Canada's telecommunications will they pass Canadians' personal data to U.S. intelligence agencies?

With the Harper government offering the New York-based company significant advantages to enter the Canadian wireless market, it is important to look at the privacy and security implications of this move.

In recent weeks it has come to light that Verizon has been working intimately with the U.S. National Security Agency (NSA) to collect the personal information of millions of its U.S. customers. The New Yorker has called the scandal "an outrageous breach of the privacy and rights of American citizens."

Reportedly, Verizon has built a dedicated fiber-optic line running from New Jersey to a military base in Virginia to transfer all communications flowing through its operations centre to U.S. authorities. The company even makes money wiretapping its customers. Verizon charges the U.S. government $775 a month ($500 for each additional month) for every wiretap it places on its customers.

While Verizon claims a court order obligated it to cooperate with the NSA, a number of commentators have pointed out that the company had legal avenues to push back but appears to have chosen not to. In its 2013 evaluation of the privacy records of 18 major technology companies the Electronic Frontier Foundation ranked Verizon at the bottom of the list. It was the only corporation that didn't receive at least one star out of six.

If asked by U.S. authorities for the personal information of Canadian subscribers Verizon would have ample reason to fulfil the request. For one, the New York based company has federal contracts worth tens of billions of dollars, including with the U.S. military. In 2007, for instance, Verizon and two other telco companies won a ten year deal worth up to $48 billion to supply various U.S. federal agencies' telecommunication needs.

Verizon's business is also dependent on the goodwill of U.S. Federal Communications Commission (FCC) regulators. In its 2013 annual report to shareholders Verizon gave a window into its motivation for cooperating with government data collection efforts: "As part of the FCC's approval of Vodaphone's ownership interest, Verizon Wireless, Verizon, and Vodaphone entered into an agreement with the U.S. Department of Defense, Department of Justice and Federal Bureau of Investigation which imposes national security and law enforcement-related obligations on the ways in which Verizon Wireless stores information and otherwise conducts its business." In other words, Verizon is dependent on U.S. government regulations for its profits so it will go to great lengths to fulfil their information requests.

Beyond the pull of U.S. government contracts and staying in the good graces of the FCC, Verizon is bound to comply with the US Patriot Act and Foreign Intelligence Surveillance Act. The Foreign Intelligence Surveillance Act sets no limits on U.S. surveillance of non-American citizens or companies and the Protect America Act of 2007 specifically allows the acquisition of foreign intelligence information from or with the assistance of communication service providers or anyone else with access to foreigners' communications.

It's long been accepted that there are privacy and national security concerns with foreign companies controlling Canada's telecommunications sector. Brian Mulroney's government produced a comprehensive telecommunications policy document that argued: "Domestic ownership of Canada's telecommunications infrastructure is essential to national sovereignty and security."

After the Conservatives announced they were looking to open the sector up to foreign telecom providers, Public Safety Canada privately warned Industry Canada that the plan poses a "considerable risk" to national security. According to a Feb. 25, 2011 letter marked "secret" that Daniel Lavoie, a senior official with Public Safety, sent to Industry Canada, "The security and intelligence community is of the view that lessening or removing restrictions from the Telecommunications Act, without implementing mitigation measures, would pose a considerable risk to public safety and national security."

The fundamental issue for foreign control over telecommunications is that laws protecting Canadians may not be enforceable when these companies' owners are located outside of Canada.

As the Conservatives woo a serial abuser of its U.S. customers privacy rights, now is a good time to ask what consequences this will have on Canadian's privacy and security.

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