Broadcasters Can't Control Incentive Prices

Communications Daily quoted Michael Calabrese on price fixing in the reverse spectrum auction:

Broadcasters in the incentive auction have no ability to influence prices they get for their spectrum in the reverse auction, an Incentive Auction Task Force spokesman said in an interview Friday. Since the reverse auction closed at a stratospheric $86 billion, some auction watchers have been suggesting that price was partially caused by broadcasters holding out for big numbers. That’s not the case, according to the FCC, explanatory blogs about auction mechanics and a tweet from broadcast-side auction consultant Pres­ton Padden using the term “uninformed blather” to describe quotes in a recent article ...

If the auction is designed so that many broadcasters froze at their highest possible price, that design isn’t optimal, said Michael Calabrese, director of the Wireless Future Program at the New America Foundation. If the FCC went into the auction knowing many broadcasters would freeze at their initial bids, “that’s not much of an auction,” Calabrese said.