The differences I see are that the three (or six) forecast figures for 2014, discussed in the post, are not related — not part of a time series. Also, they’re not multipliers. There is no compound growth occuring at the instant in time the numbers are taken, 2014. (I can, however, use your example and take any individual forecast, use the percentage increases from 2009-2014, and use the geometric mean to get a compound growth rate for that one forecast. This is because the year-to-year growth figures are 1) a related time series, and 2) multipliers.)

Yes, Cisco pulls up the average, but I don’t see it as a distortion. I expect the intent of the FCC is to weight the forecasts equally (i.e., 1/3 probability of each happening). The expected value is thus the arithmetic average.

]]>In other words the highest estimate increasingly skews your results over a longer period of time (the Cisco problem that distorts the overall FCC analysis because they basically compound a very high annual growth rate for 5 years).

In comparison the geometric mean of the three annual growth rates (39.0%) is the same whatever period you use. ]]>

On the geometric mean, I don’t see how it is more suitable in this case — averaging 2014 growth rates from different companies. The 2014 numbers are unrelated and not proportional to each other. I think I were instead to look at year-to-year growth for one company, and compute an average across several years, it would be more accurate to use the geometric mean — that would give me a compound annual growth rate.

For LightSquared, I changed my 59 MHz to 40 MHz for terrestrial mobile broadband. I had assumed that, if LightSquared were to prevail in its plans and have satellite and terrestrial up and running, either could be used for mobile broadband use. In the context of this post, I think limiting it to the terrestrial component makes sense.

]]>You’ve misunderstood LightSquared’s spectrum holdings – they were only proposing to use 40MHz of their MSS spectrum holdings for LTE, and its still unclear if any deployment will take place at 1.4GHz and 1670-75MHz. In any case, LS is done – the White House wants nothing more to do with them and the FCC has just told them there will be no approval anytime soon.

Of course the meltdown of LightSquared and Clearwire is the clearest evidence available that there is no spectrum crisis. Let’s see how many bidders there are for the 2.5GHz spectrum that Clearwire is going to sell. Aren’t we now close to the point where the FCC Chairman loses interest in pushing this issue?

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