A financial dispute between two major Internet backbones has led to dropped traffic between their networks, a high-stakes game of chicken that's angering customers affected by the network disruptions.
Early Wednesday morning Level 3 Communications Inc. terminated its "peering" agreement with Cogent Communications Inc., a step Level 3 says it took after months of fruitless negotiations. Peering is a service agreement common among ISPs (Internet service providers), which directly connect their networks and exchange traffic without charge. On Internet traffic monitor Keynote Systems Inc.'s "Internet Health Report" chart of traffic speeds between Tier One backbones, the link between Level 3 and Cogent has been colored bright red for the past day, showing no packets exchanged between the two ISPs.
Peering is mutually advantageous when both partners exchange similar traffic volumes, but Broomfield, Colorado-based Level 3 says it was carrying the bulk of the traffic in its deal with Cogent, based in Washington, D.C. "The larger company ends up disadvantaged because it ends up providing essentially free capacity," said Level 3 spokeswoman Jennifer Daumler. "In Cogent's case, we determined that the arrangement was not reasonable or commercially viable."
Cogent Chief Executive Officer (CEO) Dave Schaeffer disputes Level 3's characterization and says the dropped peering arrangement is really Level 3's attempt at playing hardball with a rival that has been undercutting it on pricing.
"The root cause of this is Level 3's strong desire to pressure Cogent into raising our prices," Schaeffer said. "They have been very vocal and very upset at our gain in market share and our pricing policy."
Large businesses and those for which network connectivity is critical generally have redundant agreements with multiple ISPs. For them, the dispute between Cogent and Level 3 is an annoyance but not a major problem; they can rely on their other vendors to route traffic across Cogent and Level 3's networks. For customers who are "single homed" solely to the network of either Cogent or Level 3, however, the dropped connection can leave some Web sites unreachable.
"None of our users in the field who dial up can get their e-mail," said Steve Bernard, IT support technician for Creative Marketing Associates, a marketing services company in Shelby Township, Michigan. His company uses a Cogent T1, but its SBC Communications Inc. dial-up access for mobile users runs through Level 3 servers. Just last week, Creative Marketing Associates had DSL (Digital Subscriber Line) installed as protection against an outage on its Cogent T1. The company's IT staff is currently reconfiguring its network to provide an alternate route in for mobile users, over its DSL. Until that change is complete, its remote employees will remain cut off.
Crocker Communications Inc. Technical Director Matthew Crocker says that how well Cogent handles customer service during this outage will affect his willingness to re-sign with the company. Crocker calls himself a "reluctant" Cogent customer -- his company, a New England telecommunications provider based in Greenfield, Massachusetts, signed its original contract with Verio Inc., which later sold the contract to Cogent. Although Cogent's rates are much cheaper than Verio's, Crocker Communications is still locked into paying the higher rate until its contract runs out.
"If I was paying regular Cogent rates I probably wouldn't be upset right now," Crocker said. "But if they're going to make me stay with the Verio contract, then I'm going to make them stay with the Verio SLA [service level agreement]."
Crocker Communications' Verio agreement specifies 100 percent network uptime and minuscule packet loss, Crocker said. Right now, he's tracking complete packet loss and no connectivity to Level 3's network. The outage hasn't technically affected Crocker Communications' operations, because it has redundancy agreements in place with Sprint Nextel Corp. and Global NAPS Inc.
Crocker is in discussions with his Cogent sales representative and would like the company to issue credits for at least a month of service, assuming this outage lingers.
Cogent CEO Schaeffer says the company won't be offering credits. "For our customers that are single-homed, we apologize, but we did not cause the problem. There is nothing we can do," he said. Cogent has left its connections to Level 3 turned on, he said; should Level 3 decide to resume its connection with Cogent at any time, traffic would once again start flowing between their networks.
Cogent is also offering to resolve the problem by picking off Level 3's customers. For any single-homed Level 3 customer in North American or Europe, Cogent is offering a year of free service at the same bandwidth currently being supplied by Level 3.
"The idea is to take Level 3 as the gatekeeper out of the middle and let their customers connect directly to ours," Schaeffer said. "Also, selfishly, we believe that at our price point, their customers will decide to buy additional bandwidth and become paying customers for us."
Level 3 spokeswoman Daumler declined to comment on Cogent's free service offer.
Cogent has long been willing to engage in brinksmanship with its peering fights. It has been through similar battles with America Online Inc. and France Telecom SA, both of which ended peerng agreements with Cogent and cut it off. Eventually, third-party arrangements were struck that let Cogent's traffic connect through outside networks, according to Schaeffer.
Customers expect Cogent's depeering fights to continue -- though Crocker, for one, said he'd be willing to put up with the spotty connectivity if he could also take advantage of Cogent's cut-rate costs.
"You kind of get what you pay for," he said.