David N. Townsend & Associates

Communications Economics, Policy, Regulation


Communications Market and Economic Studies,
Economic Modeling

David N. Townsend & Associates conducts customized studies on specific research topics across all aspects of Communications policy and economics. Research and analytical studies can focus on national infratructure or policy, or industry-specific issues, and can be designed for individual clients or under multi-client sponsorship. (Click here for representative project descriptions.)

In addition, we undertake detailed statistical modeling of telecommunications demand, costs, networks, and markets, which forms the foundation of the analysis for many studies. DNTA telecommunications Economic Models evaluate national or state economic infrastructure and markets, market entry and competitive service opportunities, and consumer demand trends, in relation to broad economic conditions.

The categories below summarize our main subjects of study and areas of expertise, and identify examples of prior projects undertaken and managed by David N. Townsend (both independently and through the consulting firm of Economics and Technology, Inc.):

Telecommunications market structure, development, impact studies
Broad-based analysis of the underlying economic structure of national or state telecommunications markets, including competitive potential, growth and expansion opportunities, service maturity and evolution. Studies include fundamental cost and demand characteristics of existing and emerging markets, service substitutability, and macro-economic factors such as impacts of restructuring, changing demographics, income and trade variations.

DNTA Economic Models employed in this type of study include macro-industry, as well as sector and service specific cost and demand models.

Representative projects:
Costa Rica, Instituto Costarricense de Electricidad (ICE):
Study of Telecommunications Market Structure and Policy Options (1996)
An analysis of the telecommunications industry market structure in Costa Rica, and recommended options for restructuring and opening the industry.
Iowa Utilities Board: Impact of the Iowa Communications Network on the Iowa telecommunications industry. (1995)
A study of the economic impact of the state-sponsored fiber optic educational network, the ICN, upon the economic position of private telecommunications operators in the state.

Demand analysis and forecasting studies, modeling
Analysis of present and prospective demand for various communications services in different markets, and under alternative economic assumptions. This type of study combines primary research such as survey and empirical analysis, with cross-reference data from prior experience or other markets. The studies can focus on a specific new service introduction, or prospects for market growth and expansion across broad industry segments.

These studies also typically incorporate one or more Economic Models, which can include estimates of income and price elasticity, impact of economic changes, and comparative demand data.

Representative projects:
Independent Study Report: "Communications and the Household Budget: Where will the Markets Be?" (1995)
A research study into consumer spending patterns and demand prospects for new communications services.
Hungarian Telecommunications Company (HTC): Development of HTC Strategic Plan (1992-1993)
Contributed to the development of the HTC 5-year Strategic Plan. Conducted review of national service demand studies and forecasts, as well as comparative elasticity estimates.

Service and network cost studies, models
Analytical studies and research into the cost structure of telecommunications networks, operators, and specific services in various markets. Based upon empirical data and comparative results, as well as review of alternative cost studies, these projects examine such factors as: long-run incremental costs (LRIC) of individual services; economies of scale and scope for integrated carriers; and market-wide network investment and operating cost characteristics and forecasts.
Cost study projects are usually based upon existing or custom-designed DNTA Economic Models, as well as review and interpretation of other industry cost models, such as the various Benchmark Cost Models (BCM), and Bellcore cost models (e.g., SCIS).

Representative projects:
Canadian Cable Television Association (CCTA): Economic Model and Strategic Analysis of the Evolution of the Canadian Cable TV Industry (1995)
Developed an in-depth economic model of the market prospects for the Canadian cable TV industry, including investment, operating cost, and demand forecasts over 10 years for a wide range of service options, including telephony.
Michigan Divestiture Research Fund: "Industry Structure and Competition in Telecommunications Markets, An Empirical Analysis" (1988)
Developed an industry structure computer model of the Michigan telecommunications industry, and analyzed long-term competitive potential in various state markets.

Comparative tariff, policy, and market analyses
Research studies of comparative prices, regulatory policies, or market conditions across national and international telecommunications markets. Primary research is based upon direct contact with telecom operators and officials in different states or countries, along with review of published data sources. Quantitative comparisons are rendered in relevant terms, such as equivalent currencies and/or purchasing power parities. Comparisons of policies and market conditions also reflect differing economic and political environments.

Comparative studies can also involve Economic Models, as for example the Tariff Comparison model, which incorporate calculations of various service elements to render valid statistical comparisons.

Representative projects:
Independent Research Study Report:
"El Precio del Teléfono: A Comparison of Prices for Telephone Services in Latin America" (1992)
Developed a tariff comparison model and database which compared telephone service tariffs across Latin American countries, for basic local and long distance services.
Eurodata Foundation: Consumer Telephone Services in the United States, Multiclient Product and Pricing Study (1994)
Conducted a research study on advanced consumer telephone services, prices and options, in 6 different U.S. states for a group of European telecommunications operators, through Eurodata Foundation.

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