This issue isn’t limited to Cogent.
There is this bizarre belief by the larger eyeball networks (and CC, VZ, and TW are the worst offenders, pretty much in that order) that they are entitled to be paid by both the content provider _AND_ the eyeball user for carrying bits between the two.
In a healthy market, the eyeball providers would face competition and the content providers would simply ignore these demands and the eyeballs would buy from other eyeball providers.
Unfortunately, especially in the US, we don’t have a healthy market. In the best of circumstances, we have oligopolies and in the worst places, we have effective (or even actual) monopolies.
For example, in the area where I live, the claim you will hear is that there is competition. With my usage patterns, that’s a choice between Comcast (up to 30/7 $100/mo), AT&T DSL (1.5M/384k $40/mo+) and wireless (Up to 30/15 $500+/month).
I’m not in some rural backwater or even some second-tier metro. I’m within 10 miles of the former MAE West and also within 10 miles of Equinix SV1 (11 Great Oaks). There’s major fiber bundles within 2 miles of my house. I’m near US101 and Capitol Expressway in San Jose.
The reason that things are this way, IMHO, is because we have allowed “facilities based carriers” to leverage the monopoly on physical infrastructure into a monopoly for services over that infrastructure.
The most viable solution, IMHO, is to require a separation between physical infrastructure providers and those that provide services over that infrastructure. Breaking the tight coupling between the two and requiring physical infrastructure providers to lease facilities to operators on an equal footing for all operators will reduce the barriers to competition in the operator space. It will also make limited competition in the facilities space possible, though unlikely.
This model exists to some extent in a few areas that have municipal residential fiber services, and in most of those localities, it is working well.
That’s one of the reasons that the incumbent facilities based carriers have lobbied so hard to get laws in states where a city has done this that prevent other cities from following suit.
Fortunately, one of the big gains in recent FCC rulings is that these laws are likely to be rendered null and void.
Unfortunately, there is so much vested interest in the status quo that achieving this sort of separation is unlikely without a really strong grass roots movement. Sadly, the average sound-bite oriented citizen doesn’t know (or want to learn) enough to facilitate such a grass-roots movement, so if we want to build such a future, we have a long slog of public education and recruitment ahead of us.
In the mean time, we’ll get to continue to watch companies like CC, VZ, TW screw over their customers and the content providers their customers want to reach for the sake of extorting extra money from both sides of the transaction.
Owen
