Today is the official opening of Huawei’s new Canadian headquarters in Markham. Huawei’s presence in Canada has grown tremendously in the three years since I met with Huawei’s first Canadian employee in a coffee shop in Mississauga.

Huawei’s network equipment now powers a number of Canada’s largest mobile networks, including Bell and TELUS. Beyond its Toronto area offices, the company has a growing R&D centre in Ottawa. Yesterday, Huawei made announcements about separate Memoranda of Understanding with Bell and TELUS announced that they have entered into a to create and maintain Joint Innovation Centres in Canada.

The collaborative platform will take Huawei and TELUS’ existing relationship to a new level, increasing business benefits for both companies. Huawei and TELUS will work together on enhancing broadband solutions, wireless and wireline offerings. According to terms of the memorandum, the length of the agreement is three years and each company will own 50 percent of the Joint Innovation Center.

In the Bell Centre, Huawei and Bell will collaborate on developing and enhancing broadband wireless solutions, core network products and value-added service offerings.

Huawei’s is a remarkable growth story that can be the source of numerous business school case studies. For today, we’ll stick with extending our congratulatory wishes on the new offices.

Huawei is a sponsor of The 2011 Canadian Telecom Summit, opening May 31 in Toronto.

Last December, Manitoba issued a consultation paper examining consumer protection in mobile services contract. It is somewhat interesting that the provincial government is looking at intervening. Recall that 3 years ago, the spectrum set aside rules ignored Manitoba’s 60% market share when determining the definition of incumbents – under the banner of “Putting Consumers First.” 

The paper observed that Quebec already has specific legislation dealing with cell phones. Quebec’s Bill 60 requires that mobile services contracts must be in writing (with a specific minimum font size) detailing information including:

• detailed descriptions of the services provided
• monthly rate for each service or the equivalent monthly cost
• total amount paid each month
• restrictions on services, including geographical limits
• contract term and expiry date
• details on how to terminate the contract
• details on any special deals offered in the contract

Ontario has seen a private members bill introduced, calling for mobile services consumer protection.

Manitoba’s consultation asks 18 questions – and submissions are due today. Mobilicity has already responded, indicating in a press release last Friday that it opposes the position taken by the wireless industry’s national association, the CWTA.

We are exceptionally disappointed with the CWTA’s lack of foresight in continuing to act only in the interests of the Big Three wireless oligopoly. As members of the CWTA, we repeatedly voiced our opposition to its submission to no avail.

According to Mobilicity, the CWTA submission will say that consumers are better served by open competitive markets and a self-regulated wireless industry with a strong Code of Conduct.

It is a feisty warning shot to the CWTA that a consensus can be very difficult to achieve among all of the service providers. However, the divergent views that may actually be a demonstration that there are alternatives emerging to counter Canada’s largest 3 carriers. The industry does not move in unison and consumers are gaining increased choice. Mobilicity did not acquire Manitoba spectrum in the last auction; new entrants – Shaw and Wind – have not yet launched service in Manitoba.

The Prime Minister has announced a “red tape reduction commission” that is to look at ways to reduce the federal regulatory burden on businesses.

Of course this is good. But I juxtapose this article with some memoranda from various law firms [such as: here and here] warning businesses that the new anti-spam act could impose all kinds of new tracking requirements, such as how you came to acquire an email address in your address book.

The Act went far beyond what what necessary when we created legislation that could inhibit activities that promote legitimate electronic commerce. As government officials prepare the regulations associated with proclaiming the bill, hopefully there will be consideration given to the potential administrative burden associated with legitimate business’ conformance with the new anti-spam rules.

The Red Tape Reduction Commission website expects to “identify options for lasting solutions to fix the regulatory system to prevent red tape “creep” over time.”

It should start with pre-emptive consideration of the administrative burden associated with the new regulations that could otherwise inhibit e-commerce adoption.

Yesterday’s CRTC decision on unbundled local loops should signal many competitors that it is time to grow up.

Wholesale aggregated services have provided a safe arbitrage opportunity for too many, lulling operators into a comfort zone that had no incentive for investment and service differentiation. Now, coupled with usage based billing from August’s wholesale access services decision, the CRTC has updated the regulatory framework for competition in telecom services.

For nearly 20 years, the CRTC has enabled competitors to ramp up their operations by building an customer base using wholesale aggregation, followed by network optimization using local loop resale and ulimately encouraging investment in alternate facilities. The latter two steps require more investment, but these provide the opportunity for real competitive differentiation in price and services.

As such, consumers derive more substantial benefits as competitors mature in their network development.

The CRTC has approved new unbundled local loop rates for colocated service providers in Ontario and Quebec [Telecom Decision 2011-24].

The rates are as low as $6.75 per month (Band A) or $13.45 (Band B), permitting alternate service providers – including internet service providers – to build out an alternative to wholesale access to bundled telco offerings. The new rates are being applied 13 months retroactively to December 14, 2009.

An article in Wire Report says that the Canadian Association of Internet Providers (CAIP) doesn’t believe that colocation is the best strategy for third-party ISPs. According to the chair of CAIP:

[Colocation] can be cost prohibitive for anyone who is trying to set up at a small central office where [they] would have limited reach and limited coverage.

It raises the question of why smaller ISPs have not aggregated their requirements under a sharing group to spread the initial costs over a wider base of subscribers and investors. Up until now, the industry associations seem to be lobbyists. Perhaps the time has come for them to provide some shared network services.

There is now certainty in the pricing of unbundled loops. With the advent of usage based pricing on aggregated wholesale services, perhaps it is time for competitors to develop differentiated services using their own facilities. It would increase consumer choice and put more competitive pressure on the larger service providers, consistent with the CRTC’s long standing policy for competition.