Last Wednesday, President Trump declared a National Emergency and issued an Executive Order on Securing the Information and Communications Technology and Services Supply Chain. Although not mentioned by name, those of us who have been following the industry clearly understood that Huawei was the prime target of the directive prohibiting:

any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service (transaction) by any person, or with respect to any property, subject to the jurisdiction of the United States, where the transaction involves any property in which any foreign country or a national thereof has any interest

Terence Corcoran wrote about the Order in the weekend Financial Post in “Call a Trump ‘National Emergency’! America isn’t No. 1 in 5G!”. He observes that Canada has (so far) taken a calm and more “measured approach” to assessing and dealing with security risks associated with the implementation of 5G.

Ottawa is right to avoid jumping aboard Trump’s panic wagon over Huawei. The underlying American motives for declaring a telecom emergency include valid national security concerns, but the real driver of the anti-China and anti-Huawei campaigns is the very real possibility that America is not winning what Trump refers to as “the race to 5G.”

In the meantime, the move also targets Huawei devices, the latest of which (the P30 Pro) is regarded by some as having the best camera in a phone. A report from Reuters says Google has suspended some of its business with Huawei, such as access to updates to the Android operating system as well as popular apps such as Gmail, YouTube and the Chrome browser. On Sunday evening, Google issued a statement on its compliance with the Executive Order:

In response, Huawei has stated that it “will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally.”

As Terence Corcoran writes, “the 5G security issues appear to be another form of old-fashioned corporate nationalism”; technology issues can be fixed, but not “the insistence on national industrial and economic dominance”.

Robert Hannigan, former director of Britain’s security agency, said recently that “blanket bans on Chinese tech companies make no sense.” If there are security risks, then solutions can easily be incorporated into British telecom networks — as surely they could be into American and Canadian networks.
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If the U.S. wants to be No. 1 in 5G, it should be able to get there by competing, without knocking out other countries.

Olivera Zatezalo, Chief Security Officer at Huawei Canada, recently spoke to media in Markham during a company open house to showcase the company’s latest products and solutions. At that event, she stated: “Huawei believes that the establishment of an open and transparent security assurance framework will be conducive to a sound and sustainable development of the entire industry and technological innovation.” She added that Huawei has built, and plans to continue to invest in, end-to-end global cyber security assurance systems.

Olivera Zatezalo, and Dr. Wen Tong, CTO of Huawei Wireless, will be speaking at The 2019 Canadian Telecom Summit, taking place June 3-5 in Toronto.

Have you registered yet?

As regular followers know, I travel to Israel a couple times a year. My daughter has a mobile plan that has ridiculously low prices for a huge data bucket and calling to 56 countries; I have a couple add-on SIM cards that cost an additional $10 per month for me to use or share with friends and family when they are travelling to the region.

Obviously, consumers love paying low prices. As I have written before, we all want lower prices for everything, other than our own wages.

Israel’s mobile market is a relevant case study. At least one observer says Israel’s experience “is a tale of short-sighted regulatory decisions that destroyed the profitability of the cellular market and undermined the ability and motivation of the facilities-based service providers to invest in infrastructure”. Yossi Abadi heads the telecommunications and media practice for one of Israel’s largest law firms. He prepared evidence on “The Israeli MVNO Experience” for the CRTC’s “Review of mobile wireless services” (TNC 2019-57). In his evidence, he asserts that low mobile service prices have led to operators “struggling with massive financial pressures that impact their ability to invest in new infrastructure… Mobile broadband subscriptions per capita have declined from #4 in the OECD in 2010 to #29 in 2017. For cellular network speeds, Israel is ranked 64th with an average download speed of 23.63 Mbps while Canada is ranked 2nd with an average of 65.90 Mbps.”

Mr. Abadi’s evidence examines the market reforms introduced in Israel in 2009 that were designed to stimulate competition and reduce mobile prices, changes “mainly driven by short-term political considerations: to cause rapid reductions of prices by increasing the number of players.”

Between 2010 and 2018, revenues for Israel’s 3 incumbent carriers, fell 61% (from ₪18.9B to ₪7.3B). “As revenues sank, the three wireless incumbents were forced to slash spending and lay off workers. Total sector telecom employees fell from 49,700 in 2010 to 25,900 in 2017, a 48% decline.” Per capita capital spending fell more than 12% at a time when OECD average spending increased by 5%; Canada’s per capita investment increased by more than 21% over the same period.

According to the evidence, as a direct result of its policies, “Israel now lags behind other OECD countries in communications infrastructure.”

Israel rolled out fourth-generation mobile networks several years behind most OECD countries. Israeli 4G represented just 14% of total mobile subscriptions as of December 2017. By contrast, in Canada, 4G comprised 62% of mobile subscriptions as of December 2017. Population coverage in Israel of 4G is about 89%. This is surprisingly low for a country with a population density of 433 persons per square Km. In contrast, Canada has 4G coverage to 99.4% of the population, and a population density of just 4 persons per square Km (less than 1/100th of Israel’s).

In 2016, the director general of the Communications Ministry told reporters, “We have a problem with the implementation of the reform because the companies don’t have enough money to invest in infrastructure.” As a result, Mr. Abadi sees difficulty for Israel’s mobile industry to invest in 5G.

His evidence concludes that Israel’s experience “is a cautionary tale that any regulator should examine before introducing MVNOs in order to reduce retail mobile prices.”

Prices did fall, but so did the quality of the networks. The massive reductions to revenues caused major reductions in capital expenditures, network roll-out and expansion, market capitalizations of the participants and even the number of employees.

The short term consumer benefits from policies driving low mobile prices may lead to higher and broader economic costs in the long run.

Yossi Abadi will be speaking about Israel’s mobile experience on June 5 at The 2019 Canadian Telecom Summit. Have you registered yet?

In an IT World article, Howard Solomon wrote about the chairman’s statement that emerged from a recent 5G Security Conference that took place last week in Prague. The 2 day meeting of officials, representing 32 countries, did not reach any binding conclusions, but the chair issued a 20-point set of “proposals”.

In the preamble, the statement observes the following characteristics of 5G networks:

• Cyber security not only a technical issue
• Both technical and non-technical nature of cyber threats
• Possible serious effects of 5G networks disruption
• Nation-wide approach
• Proper risk assessment essential
• Broad nature of security measures
• No universal solutions
• Ensuring security while supporting innovation
• Security costs money
• Supply chain security

The proposals were categorized under 4 headings: Policy; Technology; Economy; and, Security, Privacy, and Resilience.

The Prague Proposals represent an interesting statement, based on principles that could apply beyond the realm of 5G; many could be considerations for securing the internet of things, as we begin to understand the security implications of connecting devices that may not have been designed to operate in an open network environment.

Although Canada is reported to have participated only as an observer, the Prague Proposals are an inventory of the kinds of considerations that may be underway as carriers continue investing in the next generation of network evolution. Significantly, the Prague Proposals state “Every country is free, in accordance with international law, to set its own national security and law enforcement requirements, which should respect privacy and adhere to laws protecting information from improper collection and misuse.”

The challenge for many assessments is to develop a set of policies and principles rooted in objective measures, separate and devoid of political considerations. Too frequently, good policy may not make for good politics.

What path should Canada follow?

On Monday June 3, Christine Dobby from the Globe and Mail will be moderating an important panel at The 2019 Canadian Telecom Summit, Cyber Security: Protection, Pre-emption & Privacy in the Age of Bad Actors. The panel includes Dr. Ann Cavoukian, Privacy by Design Centre of Excellence at Ryerson University; Kevin Isacks, Vice President Edge Products, Ribbon Communications; Olivera Zatezalo, Chief Security Officer, Huawei Technologies Canada; and Zubaer Raja, Chief Information Security Officer, Iristel.

Have you registered yet?

Earlier this week, a new report was released by Startup Nation Central, an independent non-profit with a mission to connect business, government, and leaders from around the world with Israeli innovation. The report, “The State of Innovation: Operating model frameworks, findings and resources for multinationals innovating in Israel,” was compiled by PwC.

Israel’s innovation ecosystem is a model worth taking time to understand as economies seek to transform to be more knowledge based. There are more than 6,600 start-ups in Israel, 14 times the number of start-ups per capita in Europe. Despite having just 0.1% of the world’s population, in 2018 Israel attracted nearly 20% of global investment in cyber security. It ranks first in R&D expenditures as a percentage of GDP and the highest level of venture capital funding per capita; despite having less than a quarter of Canada’s population (8.9M versus 37M), Israeli firms secured just over double the level of VC investment (US$6B versus US$2.9B).

Why Israel? The report quotes the head of Microsoft’s Israel R&D centre crediting the country’s “population diversity, a bias toward actualizing ideas, and a global mindset focused on designing for export.”

How can Canada emulate Israel’s success? What can Canadians learn? How can companies benefit and help transform Canada’s economy?

Investing in an innovation agenda has been one of the key elements in the mandate handed to Minister Navdeep Bains when he was appointed in late 2015. Indeed, he oversaw the transition of his department from “Industry Canada” into Innovation, Science and Economic Development. Minister Bains will be the closing speaker at The 2019 Canadian Telecom Summit, being held June 3-5 at the International Centre in Toronto.

In addition, there will be panel looking at “The Innovation Economy: The Ongoing Journey to Digitize Our Lives” taking place on June 5, moderated by Namir Anani (CEO of the Information and Communications Technology Council of Canada).

Have you registered yet?

AlertReady.ca has advised there will be another test of Canada’s emergency alert system on May 8.

It would also be a good time for authorities to review how the system has performed since going into service last year.

There have been a number of Amber Alerts issued and public safety officials have correctly credited the system as a significant contributor to a more rapid resolution of the cases.

That doesn’t mean the system can’t be improved. In February, I suggested that perhaps “Canada should have a multi-agency formal process to review each use of the National Public Alert System, to help develop best practices”:

To what extent do we need a formal process to review each use of the National Public Alert System, to help develop best practices?

Should this be shared committee with public safety and communications professionals among others?#CRTC #CDNpoli

— Mark Goldberg (@Mark_Goldberg) February 15, 2019

Many commentators have scoffed at consumers who react negatively to the alerts, saying that the life a child is worth being disturbed once in a while. I think we should be considering those criticisms as an opportunity to see if the processes can be improved. Are the alerts being sent to the appropriate geography (wide enough or too wide)? Is the level of information appropriate?

Each time the trigger is pulled to transmit an alert, millions of people are being impacted, and at least one life is in imminent danger. Wouldn’t we want to make sure that alerts are following the best possible practices?

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[May 2, 2019] Alert Ready advises that the test scheduled for May 8 will not take place in Ontario and Quebec due to flooding.