Cogent’s Schaeffer: Net neutrality turnback won’t impact interconnection agreements with AT&T, Charter, others

Dave Schaeffer, Cogent Communications
Dave Schaeffer, CEO of Cogent

Cogent is aware that the incoming Trump administration could dismantle the net neutrality order, but the service provider says it won’t see any impact on the interconnection agreements it has with its ISP partners. 

Dave Schaeffer, CEO of Cogent, told investors during the Bank of America Merrill Lynch 2016 Leveraged Finance Conference that the multiyear agreement it has with service providers means that its ability to carry traffic for OTT providers like Netflix will remain unchanged.

“There is a lot of discussion that the new administration would roll net neutrality rules back, which I think would be a bad thing for the internet,” Schaeffer said. “In a selfish way it could be a good thing for Cogent because we have our agreements in place that are multiyear and their commercial agreements.”

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As part of those agreements, each interconnection partner is required to make upgrades to alleviate port congestion.  

“While we don’t pay, there’s a mandatory requirement in those agreements that when ports reach a certain level of saturation both sides must upgrade them or they will face financial penalties,” Schaeffer said. “Even if the law is reversed we’re in a good position."

Schaeffer added that if the law is reversed, “it will have a very detrimental impact on new applications being developed and innovation.”

Regardless of the outcome under the Trump administration, it’s clear that net neutrality order and the Title II reclassification helped further Cogent’s network interconnection cause.

Previously, a group of eight last mile service providers refused to upgrade their connections to the internet. These service providers were blocking their customers’ ability to access over the top video content providers like Netflix.

After being caught in the middle of a battle between the last mile providers and its content provider customers like Netflix, Cogent reached agreements to have these providers conduct regular upgrades.

“What we saw was those eight networks who were not collecting money and were peers of ours block traffic by refusing to upgrade,” Schaeffer said. “We brought that to attention to regulators here and in Europe and we have entered into agreements with all of the providers.”

Schaeffer added that “we were helped by the fact that the government did two things: It established a general set of consumer protections called net neutrality and they established jurisdiction over the internet, which is the Title II decision.”

To date, Cogent has struck agreements with all of the major last mile providers, including AT&T, CenturyLink, Verizon and Charter Communications. However, it is currently in a contract dispute with Deutsche Telekom over the German telco’s refusal to upgrade their network to alleviate congestion.

“As a result of the net neutrality order and Title II, we were able to enter into bilateral agreements and virtually all of the carriers have abided by those agreements and have upgraded,” Schaeffer said. “The only carrier that started to upgrade and stopped was Deutsche Telecom and we’re currently in commercial litigation against them because we have a contract with them that they are not honoring, while all of the other carriers like AT&T, Comcast, and Charter have been honorable and committed to net neutrality.”

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