MONTREAL - Telecom giant Bell is opposed to any special measures that would help small wireless companies purchase radio waves for expansion of their cellphone networks under rules expected to be released soon by Industry Canada.

Bell is urging the federal government to ensure the auction of the sought-after 700-megahertz spectrum doesn't favour anyone.

"This auction shouldn't be about what's the best business strategy for the new entrants," said Mirko Bibic, senior vice-president of regulatory and government affairs for Bell (TSX:BCE).

"It should be, again, about what policy has the best chance to ensure the deployment of these networks to everyone in the country," he said from Ottawa.

Wind Mobile and Public Mobile - two of Canada's smallest cellphone companies - are threatening to sit out the next auction if radio waves aren't set aside for new players like themselves because they say they will be outbid by big players like Bell, Rogers (TSX:RCI.B) and Telus (TSX:T).

Bibic said companies like Wind Mobile have been in the market for more than two years and aren't new anymore.

"These companies are capable of bidding and investing," he said, when asked about a possible boycott of the auction by Wind Mobile and Public Mobile.

He noted that Wind is backed by Russia's Vimpelcom Ltd., which has roughly 200 million mobile phone customers worldwide.

Industry Minister Christian Paradis is expected in the coming weeks to announce rules for the auction of the 700-megahertz band, known as the "beach front property'' of the airwaves for its reach. The auction is anticipated later this year or in 2013.

The new spectrum has the ability to allow cellphone calls in elevators, deep in underground parking lots in big cities and in basements and attics in suburban areas. The frequencies, made available by the switch to digital television signals, also provide better and more affordable coverage in rural Canada because fewer cellphone towers are needed to provide coverage.

Bibic said the next spectrum auction is critical to bring the next generation of wireless, mobile broadband technology to rural and remote areas of Canada.

He said Bell has deployed advanced next-generation networks that use Long-Term Evolution technology in more than a dozen urban markets and wants to bring it to the rest of the country.

However, John Maduri, CEO of Xplornet Communications Inc., said Bell is already "sitting" on unused radio spectrum in rural Canada.

"Bell's statements are simply unbelievable," Maduri said.

"This is a company that is sitting on massive spectrum holdings and has vast amounts of unused spectrum in rural Canada. It has the money, technology and the spectrum to roll out in rural Canada today. Where are they? They are actually shutting down their rural Inukshuk service."

Xplornet, a New Brunswick-based Internet service provider, has said it has raised $230 million in private financing to expand its new broadband network across rural Canada and rapidly expand its footprint.

Wind Mobile and Public Mobile have said if they can't win some of the new radio spectrum, they won't be able to expand into rural Canada.

Bibic dismissed their claims.

"So far all they have done is focus on the large urban areas, which are clearly the most profitable areas."

In 2008, the federal government set aside radio spectrum for newcomers opening up Canada's cellphone industry to more competition and raising more than $4 billion for federal coffers.

The auction saw the debut of Wind Mobile, Public Mobile, Mobilicity and Quebec-based Videotron (TSX:QBR.B) all launch into the cellphone market.

Rogers also has said it wants an open auction without any special rules while Telus has said it can accept spectrum caps.