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Let me see if I can find the podcast I listened to (or I can read this transcript) because it went into detail about the auction (the science behind it), how th
by ProAm 6y ago
Let me see if I can find the podcast I listened to (or I can read this transcript) because it went into detail about the auction (the science behind it), how they knew about the flaws before but had spent too much time and money to not use it, it talked about how the private equity ultimately gamed it and made a bucketful of money. And ultimately how the public who owns the spectrum at the end of the day did not make any money off of it. I'll update here if I can find it. It was very interesting.
Edit: you could probably also read the publications on two-sided simultaneous incentive auction and the associated nobel prize that was awarded for this.
- jsnell 6y agoI think I got most of the answers I needed from the publication I linked above. The goal of the auction was to convert the same frequencies across the country, rather than end up with a patchwork. To make this possible, there were three basic possible outcomes for a TV station. 1. Get bought out at a price you are happy with. 2. Keep your frequency. 3. Have your frequency replaced with something equivalent (capable of teaching 99.5% of your current potential audience) With that last point being the key. Even if you happened to own a bit of frequency that was needed for mobile networks, it should not allow you to extract any extra money from the system since you'd just get another frequency slice instead. How do you game this? Obviously if you own all, or almost all, of the frequencies in one geography you can just set your own price, and the third option will not trigger since there is no equivalent frequency for them to swap you with. But that's just a run of the mill market cornering scenario, and the narrative was selling this as something a lot more interesting, so there is probably more to the story than that.