RE: Cogent Communications Info

["Daniel Golding" <dan () netrail net>]

Massive oversubscription is the short answer. The long answer is that they
are a BLEC, or Building Local Exchange Carrier. The BLEC business model is
predicated on the idea that you can bring big pipes into a building or
concentration of customers and oversubscribe it. The rates for tennents are
generally quite cheap. There is generally a second oversubscription factor
applied at the city level, then sometimes a third at transit connections.

This is all generally a good deal for the average building tennant, by the
way. Oversubscription isn't bad if managed properly, and many BLECs do a
good job of it. Here are the problems with BLECs:

1) You only get the great rates if you are in a serviced building
2) BLECs usually have problems getting sufficient market penetration for a
building to break even.
3) Most BLECs are run by data-clueless voice/telco folks. (this does not
apply to Cogent, BTW. Their engineer crew are almost all from Digex, from
back when Digex was a really top-notch ISP. Their peering coordinator is
similarly clueful.)
4) Most BLECs are unwilling to give you the really good rates if they think
you are going to actually use any appreciable bandwidth. The average office
tennant really uses very little.

Almost all of the original BLECs have gone under, as the business model is
VERY difficult to sustain.

I'm not sure about the specifics of Cogent's business plan, but it's
certainly a hard road. They seem to be trying very hard to get peering,
which could only help them out.

- Daniel Golding


> -----Original Message-----
> From: owner-nanog () merit edu [mailto:owner-nanog () merit edu]On Behalf Of
> David U.
> Sent: Thursday, July 05, 2001 9:41 PM
> To: Nanog List
> Subject: Cogent Communications Info
>
>
>
> I have been reading about Cogent Communications recently and was
> wondering how
> they can possibly offer 100mbps for $3000 ($1000 if you are an
> end-user, not a
> service provider).  It just seems too good to be true and we know how that
> goes...
>
> Does anyone on NANOG have experience with them?
>
> Thoughts?
>
> For those who don't know:  Cogent offers 100 mbps at $3000 to
> service provider
> or 1000gbps for $20,000.  http://www.cogentco.com has some info
> but not much.
>
> thanks,
> -davidu