World Economic Forum Network Readiness Index--U.S. Drops From 1st to 7th

For the better part of a decade local exchange carrier management claimed that regulatory uncertainty and unbundling obligations removed incentives to build next generation networks. Since 2006 the FCC has created an information services "safe harbor" that insulates carriers from having to unbundle, share or interconnect. There is absolutely no common carrier obligation for broadband fiber and greenfield installations.

So it comes as a surprise to me that despite plenty of incentives to invest, including lost market share and revenues for local voice services, the WEF Network Readiness Index shows U.S. carriers as comparatively losing ground: http://www.weforum.org/en/media/Latest%20Press%20Releases/gitr_2007_press_release.

I appreciate that the WEF offers but one measure, but I would place more creditability to this index than say U.S. New and World's Reports' college rankings. Do Verizon and AT&T need more incentives, does the universal service fund need to expand coverage of broadband, is the U.S. suffering from a broadband duopoly regardless of what the FCC says in its zip code based measure of 200 kbps or higher "broadband" competition?

What accounts for a 7th place ranking in network readiness? Hmmm, good question.

I believe our leading telecommunications service providers no longer operate with global best practices. They haven't had to for so long. Even before enactment of the Telecommunications Act of 1996, and certainly since then, the major U.S. carriers have found it easier and more lucrative to compete in the court room instead of the marketplace. It's been too easy to demand and receive incentives to invest in next generation facilities and services.

Carriers such as Verizon and SBC had seats at the tables where the '96 Act was crafted and these carriers agreed to a simple quid pro quo: agree to lose local exchange service market share by cooperating in the introduction of competition and in turn the market access prohibitions contained in the 1956/1982 divestiture of AT&T (know as the Modification of Final Judgment) would evaporate. In other words the Bell Companies had to unbundle their local exchange network and interconnect with the competition at below market rates in exchange for access to long distance markets. As it turned out the long distance market did not prove lucrative enough to satisfy the Bell Companies, so they immediately refused to comply with the deal they cut. Putting it in its best light the Bell Companies tirelessly litigated the meaning of what they had agreed to.

So in a sense the Bell Companies willingly help create the regulatory uncertainty they claimed as foreclosing investment in next gen networks.

There's little regulatory uncertainty now, so I'd appreciate hearing from you the reasons for the decline.