Auctions & Bargaining

Every auction has its own rules based on the type of auction and its specific product market. To participate successfully, bidders require detailed knowledge of the auction’s mechanisms, the history of successful and unsuccessful bidding under similar mechanisms, the expected results of various bidding strategies, and the flexibility to adapt and respond once auction competition unfolds. Our experience spans more than 20 years and dozens of countries worldwide. For example, our advisers have assisted some of the largest telecommunication firms worldwide in preparing for and bidding in major LTE and 5G spectrum auctions. We have successfully advised participants in nearly 100 high-stakes auctions worth hundreds of billions in the telecommunications space alone. From evaluating competitors and providing simulations and guidance through the auction itself, Secretariat’s experts are there every step of the way.

High-stakes auctions are not for the inexperienced or untrained. Our team has developed proprietary software to train parties interested in understanding the mechanisms of any auction design and the advantages and likely outcomes of specific strategies. This software, which has been implemented in SMRA, clock auctions, and other environments, uses high-order computations and has been instrumental in thousands of auction rounds. It is easily and quickly customizable and helps ensure clients have the information to make the right decisions and prepare for any auction in which they decide to participate. We can quickly incorporate new proposed rules into a simulation suite for practicing bidding strategy, enabling us to see what works and what doesn’t. For our telecommunications clients, our methodologies have enabled us to develop spectrum value predictors that have frequently proven to forecast prices more accurately than other auction participants, providing our clients with an advantage in these high-stakes situations. The ultimate goal: intelligent bidding.

Even years in advance of an auction, we have helped craft auction rules. For example, in FCC’s 103 broadband spectrum auction, our team helped initiate the thought process on a new type of auction design—the one-sided incentive auction. Through an ex parte submission to the FCC on behalf of our client, experts at Secretariat outlined a general auction design that the FCC formalized and expanded upon to crate a “voucher system” through which discontiguous swaths of incumbent spectrum could be rationalized and re-allocated along with additional clean spectrum at auction. The auction was successful and raised over $4 billion, after incentive payments, for the US Treasury.

The stakes in litigation involving allegations of price fixing, bid rigging, and market manipulation can be enormous, with bet-the-company-size damage claims. Few consulting firms can equal Secretariat’s depth of in-house expertise and experience advising law firms representing litigants. We have been engaged to support litigation within the road and bridge construction industry, electricity markets, and in a well-known tobacco industry case in which tobacco buyers were alleged to have colluded to suppress the price of tobacco. Law firms throughout the world know that when sophisticated analysis and valuations are necessary, their best course of action is to add our experts to the team.