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benboy4
join:2000-12-19
Silver Spring, MD
| Cogent business model not working
Cogent is not a "small ISP". Cogent could be called a "small national ISP" though. Cogent bought the remnants of national ISPs Netrail and PSI which they added to their existing national network. (They also bought the failed Allied Riser lit building ISP.) With the acquisition of Netrail and PSI, Cogent acquired pre-existing non-transit peering agreements that Cogent otherwise would never have been able to acquire standing on their own. Netrail and PSI's peering agreements date back to the beginning of the Internet and probably have very favorable terms relating to traffic volumes, number of peering locations and ratios compared to today's riduculous standards.
Cogent's business model is to provide large amounts of bandwidth for relatively small dollars. End users get a 100Mbps connection for $1,000/month; resellers/distributors (school systems, ISPs, web hosters, etc.) can get a 100Mbps connection for $3,000/month. Cogent services are primarily delivered to Cogent lit buildings and colo facilities.
So Cogent sells bandwidth for $10/Mbps retail and $30/Mbps wholesale. These rates are a fraction of what other national ISPs are selling bandwidth for. UUNET is wholesaling DS3's (45Mbps) at $200/Mbps; AT&T and Sprint are at or above $250/Mbps for DS3 or above commitments. End user/lower commitment pricing for these ISP's are much higher.
Cogent's goal *seems* to be to take advantage of the Netrail and PSI non-transit peering agreements where they don't have to pay for bandwidth and hope that their end users don't use too much bandwidth to transit peering partners (one's where Cogent has to pay - if they even have such partners which is now in question due to the lack of fail over when AOL cut off their peering connection).
High volume hosting firms would most liley not use Cogent's bandwidth because of Cogent's reliance on non-transit peering agreements which are too shaky from an ISP of this size (again, as evidenced with AOL). Most users who are jumping on the Cogent bandwidth seem to be users who are in the lit office buildings where Cogent already is located. Thus most of their traffic is going to be pull traffic (to the end users) as opposed to push traffic from hosting providers as evidenced by AOL (who interestingly enough has a ton of pull traffic from their dialup users and if Cogent had any serious hosting customers should easily have thrown push traffic to AOL but obviously Cogent doesn’t).
IMHO, this is just the first non-transit agreement to be terminated on Cogent. As the Post article alludes to, non-transit peering partners require certain ratios of inbound and outbound traffic. AOL saw that the ratios are out of whack and cut Cogent off. How long will it be before UUNET, Sprint, CW and the other big boys pull the plug on Cogent?
Cogent's business model while initially attractive to end users belies the fact that you generally get what you pay for. Prince George's County and George Washington University have learned, you really do get what you pay for. As Cogent loses more non-transit peering agreements, their costs will rise and will either need to adjust their revenue model to be more in line with the industry or they will fall like so many DSL providers we have seen who gave it away in exchange for "volume". | |
raye
Premium
join:2000-08-14
Orange, CA
| While I am not a fan of AOL either, I appreciate and agree with the point you are trying to make. 100 Mbps access at Juno.com prices is a business model doomed to fail.
BTW, I think that other providers have begun to de-prioritize Cogent traffic. I was getting >2400 ms pings from a VisualRoute v7.0g trace from my machine (West Coast) to »www.cogentco.com and »www.pgcps.pg.k12.md.us (PG Schools). Looks like they moved their peer to AboveNet. Hope the outbound access for PG schools is better than that.
»www.gwu.edu has moved to RCN networks, and I am getting 90-95 ms pings. Interesting to see if others follow GW's lead and move to a better ISP. | |
jwvo
join:2001-07-27
Seattle, WA
| reply to benboy4
Cogent Sends FAR more traffic than it receives.
I am the Admin of an ISP that uses them as one of our upstream providers. We, for example, send a lot more data out our link that what we suck in, (3 to 4x). This is because while their transit is not the most delay free it is cheap and to that end we route traffic from our biggest bandwidth customers out it.
A couple of people i know run other ISPs that also have Cogent links who do exactly the same thing. One of the most common uses for cogent bandwidth is streaming and downloading servers, neither of which are very sensitive to latency along the path.
Even now this AOL problem has little effect on us [once i was told about it] because we just told our routers to never use cogent for traffic with level 3's AS number in the path. (that is where it gets slow from cogent).
This solution however only works for ISPs with high powered routers and multiple bgp peers (we have 3 others). The people who really get hammered with no recourse are the poor schools and businesses that use them as their only transport.
John  | |
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