+ Reallocating the spectrum involved an auction that had a multi-year planning and implementation phase.
+ Existing licensees were incentivized to sell their spectrum into the government-run auction. All told, there was $10 billion in sales into the auction, and $20 billion in purchases from the auction.
+ The auction was well-designed in that existing licensees and would-be purchasers would simultaneously be bidding, and there were incentives for both buyers and sellers to price "honestly" i.e. based on how they actually valued their licenses.
+ The design assumed each license would be independent, so to speak, so there wouldn't be coordination/strategy problems. [My sense is this was a not entirely unreasonable assumption given the nature of the existing licenses.]
+ Private equity firms bought a number of small local stations to use as holdouts. The one the story centered on was bought from the licensee for $7 million, and sold into the auction for $20 million.
+ The holdouts raised net payouts by an estimated 7%, so private equity extracted an estimated $700 million (7% of the $10 billion spread).