EchoStar inflated the AWS-3 auction by $1.6 billion

The AWS-3 reauction closed at $3.57 billion, and the number is inflated. Strip out EchoStar, which bid to raise prices rather than to win, and the auction raises about $2.0 billion. EchoStar walked away with two trivial licenses in Guam. Its purpose was never to win spectrum; it was to push the clearing price past the roughly $2.9 billion that erased its own default penalty, and Verizon and T-Mobile paid the difference. That is the story of this auction.

[Roger Entner is an analyst and founder of Recon Analytics]