Cogent Communications (Nasdaq: CCOI) is taking a new approach to solving the Internet traffic exchange process by offering to pay U.S.-based Tier 1 telcos and cable operators (Verizon (NYSE: VZ), Comcast (Nasdaq: CMCSA), AT&T (NYSE: T) and Time Warner Cable (NYSE: TWC)) for necessary network upgrades.
Having been a key figure in disputes with many of these service providers, Cogent's CEO Dave Schaeffer said that for over a year customers of these service providers have been suffering from the bottleneck imposed by these carriers.
However, Cogent said this move does not mean it is offering to enter into paid peering agreements with these providers or other players. Instead, Cogent maintains it will pay associated costs to augment its interconnections with these networks to address traffic congestion to deliver online video services, including those offered by its customer Netflix (Nasdaq: NFLX).
The service provider maintains that these service providers "are attempting to leverage their monopoly on broadband residential Internet connections to increase their profits by imposing tolls on traffic requested by their customers and delivered by other Internet service providers."
Disputes between wholesale providers like Cogent and local telcos and cable operators that deliver service to the home have become more common in recent years due to the growing popularity of online video services like Netflix and Hulu.
Cogent accused Verizon of throttling the bandwidth of broadband users that had a Netflix subscription last June. Earlier, Cogent and its customer Google (Nasdaq: GOOG) were entangled in a peering fight with France Telecom.
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