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Financial Dispute With AOL Slows Cogent Customer Access  (see also Colocation Facility Ratings for the rating and reviews of this Internet Data Center)

The Internet started to slow on Prince George's County's school computers Dec. 16, just as the schools anticipated record Internet usage for their 150,000 students and administrators doing last-minute work before the holidays.

The reason? A critical pathway shut down between one of its providers, Georgetown-based Cogent Communications Group Inc., and America Online Inc.'s network because of a business dispute between those companies.

Half of the school system's computers, operating on Cogent's network, took seven times longer to call up content sent through AOL such as AOL Time Warner Inc.'s CNN' Web site, compared with those that were connected through Verizon Communications Inc.'s network, according a manager in the school system's information-technology department.

Cogent, a three-year-old firm that sells a single product -- high-speed Internet access -- to customers like Prince George's County schools, George Washington University and about 6,000 other customers, lost the fiber-optic cable connection it had with AOL earlier this month, after the business relationship between those two companies soured. The dispute between AOL and Cogent sheds light on an essential, but little-known, system called "peering" that helps the Internet to run efficiently.

The Internet, as the name suggests but users often forget, is a system of interconnecting networks. Data pass between users by moving from one telecommunications network to another until they reach their destination.

To speed that process, telecommunications providers such as WorldCom Inc., AT&T Corp., Microsoft Corp. and AOL decided to "peer," or connect, their respective networks using the network equivalent of a freeway -- a fiber-optic channel that eases the flow of data between them. Such arrangements are as crucial to the Internet as the Beltway is to Washington's motor vehicle traffic, because those routes represent the fastest way for data to get from one place to another. Without peering, an AOL user sitting at his desk might wait much longer to download a popular Microsoft Web site, for example, because the data he requested must find a way to him over narrower and less convenient routes, resulting in delays.

Typically, among companies that peer with one another, the arrangement is mutually beneficial, and therefore the large players do not charge each other for peering.

For AOL, peering is beneficial because its 35 million users request Web sites outside its network all the time, said Nicholas Graham, a spokesman for AOL. However, each time that happens, a large file comes into the AOL network. As a general rule, AOL does not want to carry more than twice the traffic back to its users as it sends to other users outside its network, he said.

"Seeking balance in a peering relationship is a measure of equitable value," Graham said. "Any measure outside of our criteria, as far as traffic ratio goes, adds cost to the network and does not benefit us or our members."

AOL carries roughly as much traffic from Microsoft, Sprint Corp., Cable & Wireless PLC as each of those companies does from AOL, so it doesn't assess a charge. But when peer companies carry more than two times the data, AOL charges a fee, he said.

Cogent was delivering three times the data onto AOL's network it was carrying back to its customers when AOL shut off its peering connection.

AOL's move was sudden and "unilateral," said David Schaeffer, Cogent's chief executive. Cogent depends on its peering agreements with various other firms to provide high-speed service to its customers.

"The quality of our service depends on two things: the quality of our network and the quality of our agreements," Schaeffer said. Cogent is trying to fix the problem by upgrading its connection to AOL through an alternate route using Level 3 Communications Inc.

Cogent, which has been buying the assets of other distressed telecommunications firms, including those of Internet service pioneer PSINet Inc., inherited a peering arrangement of more than six months with AOL through its acquisitions, Schaeffer said. Two weeks ago was the first time AOL said it wanted $75,000 a month for the exchange of traffic that previously had been free, he said.

"I think this is part of a bigger strategy, because they're in financial trouble and they're trying to make more revenue. AOL is taking their market position to hurt people," he said. Cogent received 300 complaints from its customers, some of whom are dropping Cogent service. In response to those complaints, Cogent sent users a letter blaming the slowdown in service on AOL and directing further complaints to it.

AOL officials said Cogent is providing customers with a false description of the reasons behind the dispute. A spokesman for AOL said it is sending Cogent a "cease and desist" letter, warning it to stop making statements that have no basis in fact.

Cogent never directly established a peering arrangement with AOL, according to Graham. The connection cut off on Dec. 16 had only been a trial, and Cogent twice failed to meet the traffic-ratio criteria -- in other words, AOL was having to carry far more traffic back to its customers than it was delivering to Cogent's network, Graham said. When Cogent declined to negotiate a fee-based arrangement, AOL flipped the switch, he said.

"This is not an arbitrary position on AOL's behalf," Graham said. "Three months ago, Cogent approached us and wanted to establish a direct peering relationship, and we conducted a series of peering trials. They failed to meet our standards and criteria for a direct peering relationship. We conducted a second trial to see if we could work with them to modify a couple of things.

"During the second trial, they failed again. The connections were turned off even after we upgraded their connections to see if a free exchange of traffic was feasible," said Graham.

"They claim they met our traffic requirements. That is not true. They were nowhere near our standards. We wanted to continue dialogue with them and work this out in a cooperative, positive way. They declined our offer to do so."

The fee-for-peering dispute strikes some industry-watchers as odd.

Gordon Smith is vice president of marketing at Speedera Networks Inc., a Santa Clara, Calif.-based firm that uses many networks, including Cogent's, to deliver Internet content to its users. "Charging a fee would certainly drive up the cost of the industry as a whole. That's not a trend we welcome," Smith said.

Meanwhile, schools around Washington connected through Cogent's network are hope for a swift solution.

"If it's not fixed by January, it will have a dramatic impact" on campus communications, said a manager in George Washington University's information technology department. It could cause a serious slowdown for the university's system, which sends or transmits 6.5 million e-mail messages a month for more than 12,000 students and administrators, he said.

"By sheer luck of the draw, it happened when three-quarters of the students were gone for the holidays," he said. "But if this goes on, we'd have to change providers."