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Transceiver equipment for mobile communication is mounted on top of an artificial palm tree near a venue of the Sochi 2014 Winter Games in Sochi, October 7, 2013.THOMAS PETER/Reuters

Come February, the eyes of the world will be on the southern Russian city of Sochi as it hosts the flying skiers, sleds and pucks of the Winter Olympics. But in Sochi itself, it will be Russia's security services that will be doing an unprecedented amount of watching.

Combing through government procurement records, independent Russian researchers have uncovered an effort by the Federal Security Bureau, or FSB, to monitor all telephone and Internet traffic in and out of Sochi during the period of the Games, which run from Feb. 7 to 23.

Telephone and WiFi networks in the Black Sea resort city have been overhauled to allow unimpeded access for a surveillance system known as SORM, the Russian acronym for System for Operative Investigative Activities. SORM – initially developed by the FSB's Soviet-era predecessor, the notorious KGB, to monitor telephone traffic – has been specifically updated for Sochi, the researchers say. It allows the FSB to monitor all phone calls, e-mails and Internet use, including encrypted traffic such as credit-card transactions. And it's foreign visitors to the Winter Olympics who will be watched most carefully.

Andrei Soldatov, one of the researchers who uncovered the surveillance effort, said the FSB appeared primarily focused on tracking what foreigners do and say in Sochi, rather than on intercepting the seemingly much greater threat posed to the Games by Islamist militants based nearby in Russia's North Caucasus. He pointed out that the head of security at Sochi will be FSB deputy director Oleg Syromolotov whose specialty is counterintelligence, rather than counterterrorism.

"These guys really believe that the biggest threat is posed not by terrorists but by foreign powers, or maybe spies," Mr. Soldatov said in an interview conducted via Skype, which he said is – for now – the securest means of communicating since the FSB doesn't appear to have access to Skype calls. That may not last long.

"I think that [anyone going to Sochi] has to assume that all your communications are going to be monitored," said Ron Deibert, director of the Citizen Lab at the Munk School of Global Affairs. He said he would be particularly concerned about the targeted efforts to gain access to the mobile phones and laptops of certain visitors to Sochi.

The U.S. State Department recently put out a statement warning American visitors to Sochi that Russian law "permits the monitoring, retention and analysis of all data that traverses Russian communication networks."

While the U.S. National Security Agency had come under criticism for collecting metadata on U.S. and foreign citizens under an Internet surveillance program known as PRISM, Mr. Deibert said SORM was akin to "PRISM on steroids."

"You do have a system of checks and balances in the United States and allied countries that might have been subverted, sidestepped, whatever you want to call it, but at least it's there. Whereas [in Russia], there really is no equivalent oversight… the surveillance is very much built in, by design, into the infrastructure," Mr. Deibert said.

Mr. Soldatov, who along with fellow investigative journalist Irina Borogan has written two books on the Russian security services, said the goal of the Sochi effort appeared to be preventing any kind of protests or demonstrations that could embarrass President Vladimir Putin, himself a former head of the FSB.

"When I talk to the FSB guys, they're really obsessed with the experience of the Moscow Olympic Games of 1980. When Moscow was cleared of all troublemakers and nothing and no one was on the streets," said Mr. Soldatov, referring to the Summer Olympics that year that were boycotted by Canada, the United States and other Western countries to protest the Soviet Union's 1979 invasion of Afghanistan. "They're trying to imitate this so-called success. To make Sochi not just safe, but to look like some kind of military camp, where everything and everybody will be in order, and there will be no unauthorized activities."

Mr. Soldatov said there are almost no legal restraints on what the FSB can do, particularly if it's involved in a declared counterintelligence operation.

While the NSA, at least in theory, needs to get a court order – and then present that order to the Internet service provider (ISP) – before spying on communications, the FSB has made the installation of SORM mandatory for all ISPs in Russia. An FSB agent only needs the permission of his superiors to begin monitoring an individual or group.

The latest evolution of the system is known as SORM-3, and was built with the equipment produced by U.S. firms Juniper Networks and Cisco Systems, as well China's Huawei Technologies and France's Alcatel-Lucent.

While SORM appears targeted at foreign visitors to Sochi, the FSB is using a rougher, lower-tech approach in dealing with potential domestic threats to the Games. Human-rights groups say there has been a surge in low-level violence in Chechnya and Dagestan, restive Muslim regions of Russia just a half-day's drive from Sochi.

There has also been a spike in the number of "forced disappearances" of young men – a hallmark FSB tactic for pressuring those it suspects of involvement with militant groups. Since the start of last year, nearly 1,000 people have been killed in sporadic violence across the North Caucasus.

Doku Umarov, the head of the Caucasus Emirate – listed as a "terrorist" organization by the United Nations – has already called for attacks on the Sochi Olympics, which are being held on territory his group claims for a future Islamic state. Experts on the region say they expect some kind of security threat to the Games. "If this attack [on Sochi] does not happen, it will very much harm the reputation of Umarov," said Gregory Shvedov, editor-in-chief of Caucasian Knot, an independent website.