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There has been an increase in papers in the economics literature that analyze interconnection issues. Most of these papers are highly technical and not readily accessible for people not trained in the economics tradition but oriented towards the study of telecommunications issues. This paper reviews the literature on interconnection by simplifying the technicalities and positing in an intuitive way the main arguments that are relevant for the practical analysis of interconnection. The paper is a bridge between the analytic literature and the practical job of studying interconnection issues. The paper studies one-way-interconnection and two-way-interconnection. We study the literature on efficient component pricing rule (ECPR), price caps and regulation based upon long run incremental cost. We also study interconnection models in two ways, the potential incentives for collusion and the incentives to price discriminate. We also study the issue of the high charges for mobile termination. We rationalize this as a competitive bottleneck and we relate this result with the disadvantages of the calling party pays scheme. In the end we make policy proposals that attempt to reduce market power issues that emerge in the interconnection analysis. The proposals also diminish the incentives to discriminate between on-net calls and off-net calls. In the policy proposals section we discuss schemes such as bill and keep and cost based regulation as tools that attempt to solve the interconnection problems that we find. [ABSTRACT FROM AUTHOR]

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Using the reasoning that assumes that a pro-cyclical Solow residual is an indication of the presence of market power, the paper estimates the Lerner index. At the same time in which we estimate the Lerner index, we measure the impact of industry structure variables (concentration and imports) on this index. Because we have panel data, we also allow for a change in the impact of these variables across time. For the whole manufacturing sector, we find that concentration and imports have a differing impact on the Lerner index across the business cycle. We find evidence that shows that the Lerner index behaves anticyclically. And we also make the analysis by type of good (durables and non-durables) and find differing impacts of concentration and imports by type of good. [ABSTRACT FROM AUTHOR]