Canadian telecoms are bidding on Wi-Fi airwaves 30,000 feet up

The days of switching off your BlackBerry or iPhone while flying through Canada’s skies appear to be numbered, as Ottawa prepares to auction off the wireless airwaves necessary to provide airline passengers with inflight wireless Internet services.

The Toronto Star’s reported this weekend that three companies have been approved as bidders for an Industry Canada auction of air-to-ground wireless spectrum scheduled to take place later this month. Telecom heavyweight MTS Allstream Inc. and two smaller firms, SkySurf Canada Communications Inc. and Wair Inc. have placed deposits of more than $1 million with the federal agency.

MTS spokesman Greg Burch declined to comment on the company’s plans for the airwaves, citing auction rules. But documents filed with Industry Canada show that the subsidiary of Manitoba Telecom Services Inc. has signed a memorandum of understanding with U.S. firm Aircell LLC.

Last September, Ilinois-based Aircell announced that they were in talks with Air Canada and WestJet to offer Wi-Fi Internet services on flights but it’s still not yet clear whether Transport Canada regulations will allow passengers flying within the country to make use of it.

Maryse Durette, a spokeswoman for the federal agency, said Canadian rules prohibit passengers from using portable electronic devices during flights because of concerns they will interfere with aircraft systems. “As soon as you fly through Canadian skies, the use of a portable electronic device on-board the aircraft is prohibited.”

Air Canada is betting that it’s only a matter of time before Aircell or a rival company runs a Canadian network. The airline is planning to test Aircell’s GoGo service some time this year on two aircraft flying from Toronto to San Francisco and Los Angeles, and has indicated it intends to expand the service across its network once Aircell acquires access to airwaves in Canada.