Cogent Cites Congestion Progress With Major Carriers Despite 'Byzantine' Process

Cogent has congestion-free interconnection with AT&T and Comcast, is close to getting there with Time Warner Cable and Verizon, and CenturyLink may not be far behind, CEO David Schaeffer said on a quarterly earnings call Thursday. Schaeffer said large carriers have a "Byzantine" approach to adding interconnection ports and increasing capacity. It's been an "iterative process" in which Cogent has provided its demand projections to interconnection partners, and "in every case they thought we were too optimistic," but it turned out "we were too conservative," he said. When the parties added ports, they quickly filled up, so they continue to add ports, he said. The process takes time, but Schaeffer said he's confident Cogent will be congestion free with TWC and Verizon by the end of this quarter, and he's hopeful it will get there with CenturyLink in early Q2. Internationally, he said Cogent has negotiated additional port capacity with Orange, though they haven't yet reached a long-term agreement. He's also hopeful of reaching an agreement soon with Telefonica. But Cogent is suing Deutsche Telekom in U.S. federal court (see 1512090070) for allegedly breaching its contract to provide settlement-free upgrades, and there has been no improvement since Cogent's complaint was filed. "So we think this will probably be full adjudicated," he said. Schaeffer said the interconnection improvement is helping the company increase business. In its earnings release, Cogent reported Q4 service revenue growth from a year earlier of 12.1 percent (on a constant currency basis). Cogent had $3.7 million in legal fees in 2015 advocating for net neutrality, the company said.