I always wondered -as a person who has been working in the telecomms field for the past 11 years- how the firms developed their spectrum bidding strategies and how they implemented those. After all, these are billion-dollar games that have long and profound impacts in the firms as well as in the industry, and even in the economy of the country.
Spectrum auctions are sealed-bid long-run auctions where bidders -typically incumbent telecom operators- bid aggressively to get the spectrums that they need for their future infrastructures. FCC is the regulator of such lucrative auctions. FCC is incentivized by highe, successful bids and fair outcomes.
Recently, C-block auction resulted in a 8-week 20-billion dollar bidding process. FCC had a 4.6 billion dollar reservation price in this block. Before Google joined the bidding, no one knew why it was doing so. Google was actually planning to invest into the applications and handset business that would work on this spectrum block. As a result, Google needed big incumbents to invest heavily in this auction so that it can develop and sell handset and application products. In other words, Google played a billion-dollar chicken game, increasing its own bidding multiple times at points. Result: Google made sure that reservation price is reached, but it did not win. It was the outcome that Google desired. This strategic, well-played move was a big win for Google. Playing devil's advocate: What would happen if Google was the winner of the bidding process?In my opinion, they could either have dived into an industry that they are not very familiar with and failed eventually, or they could have sold the spectrum to another firm, potentially writing off some loss.
More details in the following article:
http://www.pcmag.com/article2/0,2817,2281382,00.asp
Showing posts with label descriptive. Show all posts
Showing posts with label descriptive. Show all posts
Thursday, December 10, 2009
Sunday, December 6, 2009
Eurovision Voting System
When we discussed voting theories in our SDA class, I thought about the voting system in Eurovision. Those who are from Europe or who have lived there in the past know very well that Eurovision is a major commercial, entertainment and political matter throughout Europe. It is an annual Europe-wide song contest that has long been controversial. It is broadcasted simultaneously all around the world to millions of viewers.
Previous voting system was such that only fans in each country determined the outcome by voting for their most favourite songs excluding the songs from their own countries. However, historically neighboring countries voted for each other (Balkan Block for instance). So, countries with most number of neighbors had an advantage. Also, countries who wanted to send a political peace signal to some other countries voted for them (e.g. Turkey to Armenia or Cyprus). Finally, diaspora voters became really strong as the immigrants in another countries voted heavily for their original countries. Due to these reasons as well as increasing number of new Central and Eastern European countries on the map, the chances of winning for Western countries have been significantly reduced. In protest, some of them have withdrawn from the contest. Even, petitions were started to change the voting system:
http://www.petitiononline.com/newesc/petition.html
In 2008, the voting system was changed to a half-jury, half-fan system which aimed to eliminate the criticism around the voting method. It also aimed to increase the musical value of the contest rather than political supports or visual aspects of the competition:
http://www.telegraph.co.uk/culture/music/music-news/5332681/Eurovision-2009-new-voting-rules.html
Under new rules, viewers from 42 countries vote for 25 finalists songs by phone or text. Each viewer can vote 20 times but cannot vote for one's own country. Next, judges in each country vote. The two different types of votes in each country are then combined equally, which determines the country votes for the Eurovision song contest: The favourite songs get 12, 10, 8, 7, 6, 5, 4, 3 ,2 and 1 points in decreasing order of preference. The song/country with the highest number of cumulative points win the contest. A snapshot of the points assigned by each country to others is shown below (You can also click this picture to see the URL link of Eurovision contest):
Below video shows the actual live voting process:
http://www.youtube.com/watch?v=KBqTo2lIIGs
This method is very similar to a modified Borda count; modified in the sense that jury determines one half of the votes and millions of viewers determine the other half. However, due to larger point allocation system around the best two (12 and 10 points), the results will be in more in favour of top-2 preferred songs/countries in general.
It looks like, regional and diaspora biases were mitigated to some extent in 2009 thanks to the new voting system. However, we need more samples to make a more informed evaluation whether the new voting system is fairer in evaluating the musical content. My personal opinion is that judges will be biased to a great extent too. Eurovision contest creators will need to make further changes to make the competition more around the music.
Previous voting system was such that only fans in each country determined the outcome by voting for their most favourite songs excluding the songs from their own countries. However, historically neighboring countries voted for each other (Balkan Block for instance). So, countries with most number of neighbors had an advantage. Also, countries who wanted to send a political peace signal to some other countries voted for them (e.g. Turkey to Armenia or Cyprus). Finally, diaspora voters became really strong as the immigrants in another countries voted heavily for their original countries. Due to these reasons as well as increasing number of new Central and Eastern European countries on the map, the chances of winning for Western countries have been significantly reduced. In protest, some of them have withdrawn from the contest. Even, petitions were started to change the voting system:
http://www.petitiononline.com/newesc/petition.html
In 2008, the voting system was changed to a half-jury, half-fan system which aimed to eliminate the criticism around the voting method. It also aimed to increase the musical value of the contest rather than political supports or visual aspects of the competition:
http://www.telegraph.co.uk/culture/music/music-news/5332681/Eurovision-2009-new-voting-rules.html
Under new rules, viewers from 42 countries vote for 25 finalists songs by phone or text. Each viewer can vote 20 times but cannot vote for one's own country. Next, judges in each country vote. The two different types of votes in each country are then combined equally, which determines the country votes for the Eurovision song contest: The favourite songs get 12, 10, 8, 7, 6, 5, 4, 3 ,2 and 1 points in decreasing order of preference. The song/country with the highest number of cumulative points win the contest. A snapshot of the points assigned by each country to others is shown below (You can also click this picture to see the URL link of Eurovision contest):
Below video shows the actual live voting process:
http://www.youtube.com/watch?v=KBqTo2lIIGs
This method is very similar to a modified Borda count; modified in the sense that jury determines one half of the votes and millions of viewers determine the other half. However, due to larger point allocation system around the best two (12 and 10 points), the results will be in more in favour of top-2 preferred songs/countries in general.
It looks like, regional and diaspora biases were mitigated to some extent in 2009 thanks to the new voting system. However, we need more samples to make a more informed evaluation whether the new voting system is fairer in evaluating the musical content. My personal opinion is that judges will be biased to a great extent too. Eurovision contest creators will need to make further changes to make the competition more around the music.
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