Latest Peering War
November 13, 2008
I’ve received several great questions via email recently — thanks much to those of you who are participating in the discussions in this forum, both with your ideas and your questions. Here’s a question I thought may be of interest to you.
What do you think of the latest peering war between Cogent and Sprint?
In one statement: Here we go again. It appears each time there has been a publicized peering dispute, Cogent shows up. I would feel different if we had the likes of Level 3 or a Global Crossing having disputes with others, but they don’t.  All I can speculate upon this time is what Cogent stated previously about a drop in internet traffic on their backbone.
They made this admission on their last quarterly call. If the traffic drop is severe enough, it would cause an imbalance between carriers resulting in Cogent traffic being carried for free in a load sharing arrangement.  What would drive traffic to fall? Well, if Cogent is the lowest priced provider, perhaps the theory of elasticity of demand just isn’t working. As the theory goes as you lower your prices, usage demand rises. Other carriers have not reported a drop in traffic demand albeit priced higher that Cogent. Other issues can affect traffic loss as well – things like coverage or network reliability. I don’t know if reliability is a problem for Cogent, but what I do know is that it is quite typical in telecom to get what you paid for.
Next quarterly call, let’s see what Cogent reports on churn and their traffic patterns.
Shoot Dave an email with your take, or post a comment or question below.
Written by Dave Rusin - Telecom Executive
Posted by admin | Filed Under American telecom, Telecom USA, Telecom broadband, Telecom news, Telecommunications companies, Telecommunications industry, Telecommunications news, Trends + telecommunications, Trends in telecommunications
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