Vickrey at ColumbiaThe word on the street is the telcos won't bid the $86B the broadcasters want and the auction may go on until next year.  That would result in a much lower figure for far less than the 120 MHz on offer. Harold Feld wonders if the broadcasters have priced themselves out.

Mike Calabrese, one of the best in D.C., tweets "likely to end up selling 70 MHz for $30-40B by mid/late 2017." John Hodulik and Craig Moffett, two of the best on Wall Street, think the three key bidders - Verizon, AT&T & T-Mobile - don't want to spend more than $30B. Higher totals are unlikely unless others - Dish, Comcast, ? - decide to come in and none are certain.

Caution, please. The last auction came in three times as high as I - and most of the experts above - expected.

This one is particularly hard to guess because the fiendishly brilliant Stanford Professor Paul Milgrom led the design. He believes this is the most complicated auction in history. I've learned from Paul's lectures and papers. There's a great deal of wisdom in the parts I understand but much is over my head. 

The multiple lengthy auction rounds are an attempt at efficiency, In the first round, the TV stations set their prices. Because they only had one chance, they had incentive to keep the prices down. If their spectrum didn't sell, they were stuck with whatever they could earn from it directly - not very much. It apparently wasn't incentive enough; the $86B is quite high. Then, the telcos are invited to bid things up. No match, next round. The goal then is to get as much as possible for the spectrum. Whatever is left over goes to the gov to spend on public safety. (Mostly Verizon and AT&T.)  

Milgrom gamed the 2006 auction and believes he saved Comcast a cool $1.2B as a consultant. Knowing all the tricks, he doesn't want anyone to be able to reverse engineer this auction and get an unfair advantage. He set a goal of coming close to a theoretically perfect result; the system he developed is not for the faint-hearted. Auction theory is now so advanced professional economists who aren't specialists often can't follow it.

While Lowell McAdam, Charlie Ergen, and a few other CEOs make the ultimate decisions, the action on the ground will be managed by a few dozen economists most of whom know each other well. These are very high stakes but they are spending other people's money. Many of them are friends for more than a decade who have collaborated on academic papers and consulting when they weren't representing competing bidders. Many of the best came together for a Columbia Symposium (below.) I think there's a tape and I'll link if I find it. Listen carefully and you'll understand more than almost any public reports.

If this goes well, his prize is almost certain. 

 

Spectrum Auction Design, Experience and Post Auction Market Structure.

50 years after Columbia's William Vickrey's seminal contribution to auction theory, his ideas have been applied to governments' selling of spectrum licenses - first in Britain, then in Australia, Austria, Canada, Ireland, the Netherlands, Switzerland, and others. The application of Vickrey type auctions to spectrum rights is rapidly evolving. The Federal Communications Commission in Washington, is now considering extending Vickrey's ideas to an even grander two-sided, "incentive", auction innovation. The FCC, which pioneered the application of modern auction theory to spectrum rights, is attempting a major re-allocation of important spectrum by clearing out television stations from their spots on the spectrum and selling the freed channels to mobile network operators. It also wants to raise substantial revenues for the Federal budget. To do so it is considering approaches such as a Combinatorial Clock Auction ("CCA"), which is based on the Vickrey auction.

The aim of the conference is to look at the theoretical perspectives for such incentive auctions, how they have worked out in the real world, and what their prospects are. These issues are important to academics, industry stakeholders, and policymakers.

The conference will include noted speakers from academia, industry, consultancies, and government. They come with experience in both the US and abroad, and on the bidder, auctioneer, and public interest sides.

Dreft Agenda

  • 9:30am Opening Remarks
  • Prof Eli Noam, CITI Director
  • 9:45am Introduction
  • David Salant, CITI, TSE
  • 10:00 - 11:00am European CCA Experience
  • Simon Edkins (Switzerland, UK) (Copenhagen Economics and formerly Orange)
  • Allan Ingraham (Navingant)
  • Ernesto Wandeler (Austria, Netherlands, Switzerland) (BCG)
  • Moderator - Gary Biglaiser (UNC)
  • 11:00 - 11:15am Coffee Break
  • 11:15 - 12:35pm Bid Strategy in CCA auctions
  • Jon Levin Stanford
  • Malcolm Ross (Merlin Consulting)
  • Greg Attiyeh (FTI Consulting)
  • Peter Cramton (University of Maryland)
  • Moderator -(David Salant)
  • 12:40 - 2:00pm Lunch & Keynote Speaker
  • Paul Milgrom (Stanford)
  • 2:00 - 3:20pm Auction Design Issues
  • Richard Steinberg LSE - A Framework for Decentralised Combinatorial Auctions with Applications to Subadditive Bidders (with Mahyar Salek)
  • Larry Ausubel (UMd) - the Combinatorial Clock Auction - Potential Enhancements.
  • Michael Calabrese (NAF)
  • Janice Obuchowski (PFF)
  • Moderator Eli Noam
  • 3:20 - 4:00pm Operator concerns
  • Verizon (Charla Rath)
  • T-Mobile (Kathleen Ham)
  • DTAG (Matthias Leonhard-To Be Confirmed)
  • Moderator- Malcolm Ross
  • 4:00 - 4:15pm Coffee Break
  • 4:15 - 5:30pm Innovations for Incentive auctions (Moderator: David Salant)
  • FCC led discussion Evan Kwerel (FCC)
  • Ilya Segal (Stanford)
  • Greg Rosston (Stanford)
  • 5:30pm Concluding Remarks & Reception

 

Spectrum Auction Design, Experience and Post Auction Market Structure.
Friday June 20th 2014Columbia University, Uris Hall Room 142To register please click here

50 years after Columbia's William Vickrey's seminal contribution to auction theory, his ideas have been applied to governments' selling of spectrum licenses - first in Britain, then in Australia, Austria, Canada, Ireland, the Netherlands, Switzerland, and others. The application of Vickrey type auctions to spectrum rights is rapidly evolving. The Federal Communications Commission in Washington, is now considering extending Vickrey's ideas to an even grander two-sided, "incentive", auction innovation. The FCC, which pioneered the application of modern auction theory to spectrum rights, is attempting a major re-allocation of important spectrum by clearing out television stations from their spots on the spectrum and selling the freed channels to mobile network operators. It also wants to raise substantial revenues for the Federal budget. To do so it is considering approaches such as a Combinatorial Clock Auction ("CCA"), which is based on the Vickrey auction.

The aim of the conference is to look at the theoretical perspectives for such incentive auctions, how they have worked out in the real world, and what their prospects are. These issues are important to academics, industry stakeholders, and policymakers.

The conference will include noted speakers from academia, industry, consultancies, and government. They come with experience in both the US and abroad, and on the bidder, auctioneer, and public interest sides.

Dreft Agenda

  • 9:30am Opening Remarks
  • Prof Eli Noam, CITI Director
  • 9:45am Introduction
  • David Salant, CITI, TSE
  • 10:00 - 11:00am European CCA Experience
  • Simon Edkins (Switzerland, UK) (Copenhagen Economics and formerly Orange)
  • Allan Ingraham (Navingant)
  • Ernesto Wandeler (Austria, Netherlands, Switzerland) (BCG)
  • Moderator - Gary Biglaiser (UNC)
  • 11:00 - 11:15am Coffee Break
  • 11:15 - 12:35pm Bid Strategy in CCA auctions
  • Jon Levin Stanford
  • Malcolm Ross (Merlin Consulting)
  • Greg Attiyeh (FTI Consulting)
  • Peter Cramton (University of Maryland)
  • Moderator -(David Salant)
  • 12:40 - 2:00pm Lunch & Keynote Speaker
  • Paul Milgrom (Stanford)
  • 2:00 - 3:20pm Auction Design Issues
  • Richard Steinberg LSE - A Framework for Decentralised Combinatorial Auctions with Applications to Subadditive Bidders (with Mahyar Salek)
  • Larry Ausubel (UMd) - the Combinatorial Clock Auction - Potential Enhancements.
  • Michael Calabrese (NAF)
  • Janice Obuchowski (PFF)
  • Moderator Eli Noam
  • 3:20 - 4:00pm Operator concerns
  • Verizon (Charla Rath)
  • T-Mobile (Kathleen Ham)
  • DTAG (Matthias Leonhard-To Be Confirmed)
  • Moderator- Malcolm Ross
  • 4:00 - 4:15pm Coffee Break
  • 4:15 - 5:30pm Innovations for Incentive auctions (Moderator: David Salant)
  • FCC led discussion Evan Kwerel (FCC)
  • Ilya Segal (Stanford)
  • Greg Rosston (Stanford)
  • 5:30pm Concluding Remarks & Reception

Steve Hilton, co-founder and managing director of research and analyst firm MachNation, describes it rather well: "The LPWA world is a bit like a nicely prepared minestrone," he said. "Stir the bowl a little bit and up pops another surprising vegetable you didn't see a moment ago."

For sure, competing technologies continue to emerge in the LPWAN segment.

Proprietary technologies such as Sigfox, Ingenu andLoRa have already made clear their ambitions to become globally available standards for public LPWA networks using unlicensed spectrum. They now face increasing competition from so-called cellular IoT technologies that fall under the 3GPP standardisation umbrella and will operate in licensed spectrum.

Aapo Markkanen, principal analyst at Machina Research, also notes there are more technologies still. "W

eightless-N, Weightless-P, NB-Fi (WAVIoT), Accellus, Flexnet (Sensus), Telensa UNB, and Synergize (Aclara) come to mind," he said. "And those are only the ones that are LPWA in the real sense of the term. You can also find a bunch of others that are going after many of the key applications, but they've built on a mesh architecture so they sit under a different technology umbrella."

Cellular IoT developments have also contributed significantly to the "minestrone" of standards and acronyms in the LPWA field. Here, David Hammarwall, Ericsson's head of 4G/5G services and infrastructure within the Swedish vendor's radio business unit, summarises the current situation by saying: "EC-GSM, NB-IoT [now renamed LTE Cat-M2] and [LTE] Cat-M1 are the main [cellular IoT] LPWA contenders. It depends on the operator's use cases and network evolution strategy which is the best option for them."

 

dave ask

Newsfeed

The 3.3-4.2 spectrum should be shared, not exclusively used by one company, concludes an important U.S. Defense Innovation Board report. If more wireless broadband is important, sharing is of course right because shared networks can yield far more

It does work! Verizon's mmWave tests over a gigabit in the real world. 
The $669 OnePlus 7 Pro outclasses the best Apples and probably the new Galaxy 10 or Huawei P30 Pro. Optical zoom, three cameras, liquid cooling, Qualcomm 855 and more.
Korea at 400,000 5G May 15. Chinese "pre-commercial" signing customers, 60,000-120,000 base stations in 2019, million+ remarkable soon. 
5G phones Huawei Mate 20, Samsung Galaxy 10, ZTE Nubia, LG V50, and OPPO are all on sale at China Unicom. All cost US$1,000 to 1,500 before subsidy. Xiaomi promises US$600.
Natural monopoly? Vodafone & Telecom Italia to share 5G, invite all other companies to join.
Huawei predicts 5G phones for US$200 in 2021, $300 even earlier
NY Times says "5G is dangerous" is a Russian plot. Really.
Althiostar raised US$114 million for a virtual RAN system in the cloud. Rakuten, Japan's new #4, is using it and invested.
Ireland is proposing a US$3 billion subsidy for rural fibre that will be much too expensive. Politics.
Telefonica Brazil has 9M FTTH homes passed and will add 6M more within two years. Adjusted for population, that's more than the U.S. The CEO publicly urged other carriers to raise prices together.
CableLabs and Cisco have developed Low Latency XHaul (LLX) with 5-15 ms latency for 5G backhaul,  U.S. cable is soon to come in very strong in wireless. Details 
Korea Telecom won 100,000 5G customers in the first month. SK & LG added 150,000 more. KT has 37,500 cells. planning 90% of the country by yearend. 
The Chinese giants expect 60,000 to 90,000 5G cells by the end of 2019.
China Telecom's Yang Xin warns, "Real large-scale deployment of operators' edge computing may be after 2021." Customers are hard to find.
Reliance Jio registered 97.5% 4G availability across India in Open Signal testing. Best in world.

More newsfeed

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Welcome On Oct 1, 2019 Verizon turned on the first $20B 5G mmWave network with extraordinary hopes. The actual early results have been dismal. Good engineers tell me that will change. Meanwhile, the hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 3X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.