Sprint and Cogent Kiss and Make Up

December 23rd, 2008 by · 1 Comment

Internet backbone operators Sprint Nextel (NYSE:S, news, filings) and Cogent Communications (NASDAQ:CCOI, news, filings), which fought a brief peering war last month resulting in a two day partition of the internet, have come to an agreement.  Initially it seemed has if the dispute might be headed for court, with both parties claiming the other acted in bad faith in a test peering arrangement.  But the truce held, and the treaty has been signed, and everyone can just go home.   In an extremely brief PR, the companies said:

Sprint Nextel and Cogent Communications announced that they have reached a multi-year interconnection agreement for the purposes of exchanging Internet traffic. This agreement will benefit the customers of both Sprint and Cogent and resolves the earlier dispute to the satisfaction of both Parties. The agreement is in accordance with both Parties’ previous and long standing interconnection policies and agreements. The specifics of this agreement are confidential.

And that’s that, I guess.  What had promised to be an ugly contract dispute in court is just over.  It is very common for the details of such agreements to be kept private, nobody wants to be seen as losing.  But I’ll bet that sometime in the next few months someone will manage to claim victory, they always do.

Reading between the lines the wording suggests that a new peering agreement is in place, which means that Cogent is still transit-free.  Of course, it could be private peering with a fee, but we will never know.  For Cogent, backing away was not really an option.  The quick resolution implies that Sprint wanted to make this go away and made concessions.  Fighting such an ugly public relations battle over perhaps a tenth of a percent or less of their revenue had to seem pointless, especially in the current environment.

Once again it seems, the big guy has misunderestimated the little guy with nothing to lose.  For the future, I suspect that such peering disputes will become less common as IP transit becomes less important as a source of revenue for most carriers.

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Categories: Internet Backbones · Internet Traffic

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