1) The consolidated feeds are CTA/UTP (legally mandated committees,
http://en.wikipedia.org/wiki/National_market_system_plan) , not Bloomberg. Yes, Bloomberg can provide a similar feed and probably does with some enrichment, but you do not reference the NBBO (National best bid & offer) from a Bloomberg feed.
Also, you do not need to colocate your server to receive a direct feed from the exchange. Anyone with an internet connection and some spare cash can get a direct feed. Anyone that can afford to pay for colo space can also get the feed pretty much instantly (limited by the speed of light).
There is no such thing as letting HFT (what's that?) see orders up to 30ms before, not anymore. Colos are a pain in the ass to manage and cost an arm and a leg, so if you're not in the microsecond and nanosecond race, there's little benefit in paying for colo space. So yes, the ethics can be argued, but these firms are simply paying rent for some space.
Anyone willing to pay the same rent can get the same 'speed improvement'. Retail investors and most hedge funds don't need this speed because they do not have the infrastructure, talent base, or capital to build a trading system that would make any money off of the minimal speed advantage. People argue all this ultra low latency stuff adds liquidity to the market, but I think in the end it's just creating noise and scaring away people that don't understand how the speed is used in the market.
Technologically, Canada is stuck in the stone age compare to what's going on in the states, and I think that's actually a good thing (Canadian working in the states).
To summarize, the advantages are: speed, more speed(colo), and arbitration opportunities against those that just rely on consolidated feeds.