Cogent Communications
Cogent Communications At present, it has a wide coverage all-optical IP over DWDM network, including the inter city optical fiber link connecting Seattle, Washington, and Budapest, Hungary, as well as Oslo, Norway, and Miami, Florida, with a total mileage of 25000 miles, and a metro optical network with a mileage of 10000 miles, directly connecting more than 1180 buildings with 225 ring networks.
It is said that Cogent can provide 8 to 16 way 10Gbit/s links anywhere in North America; In Europe, 6 to 12 10Gbit/s links can be provided. And Cogent said it would further upgrade these networks.
Recently, Lightwave interviewed Dave Schaeffer, the CEO of Cogent, and learned a lot about the company's network planning and expansion plans from him. It deeply discussed the business model and Ethernet based business, as well as the driving force of forward thinking when the company was born and some luck encountered in its development.
Network expansion
Schaeffer said that Cogent will expand its existing network through three ways: adding new routes, adding metro fiber and adding new wavelengths on existing links. Just last quarter, Cogent deployed a new router in Italy, expanding its network from Milan to Venice, Florence and Padua, and connecting it with Rome, as well as Stockholm in Sweden and Oslo in Norway. In the United States, Cogent's network extends from Los Angeles to Las Vegas.
Recently, cities including San Antonio, Texas, Cleveland, Ohio, and St. Louis, Missouri have been included in Cogent's metropolitan fiber network. At present, Cogent only provides metro network connectivity through data centers or some network connection buildings in these places.
Schaeffer affirmed that Cogent has been implementing the strategy of adding new wavelengths from beginning to end. Its network only contains one 10Gbit/s wavelength at the initial stage of construction. With the development of the network, Cogent has deployed eight 10Gbit/s wavelengths in North America, and some specific routers also have 16 10Gbit/s wavelengths.
This network uses both CWDM and DWDM technologies. Each building connected to the Cogent network has 2Gbit/s bandwidth, and it continues to increase access bandwidth by increasing link rate or wavelength. At present, the widest dedicated bandwidth can reach 80Gbit/s.
"Our development idea is quite different from that of other network providers. Our network is more like a gigabit LAN shared by everyone," Schaeffer explained. "In the metropolitan area, we have a series of ring networks, and all buildings connected to the network have the ability of environmental protection and switching. Each ring is a central radial structure. Each building is specially assigned with a pair of wavelengths. These wavelengths can be reused in the clockwise and counterclockwise directions of the ring. "
Cogent provides the above protection for the third layer of the network, but does not provide SONET or optical link protection. At the edge of the network, the Open Shortest Path First Protocol (OSPF) is used to complete the convergence, while at the core of the network, the intermediate system to intermediate system routing protocol (ISIS) is used to complete the convergence.
When talking about the recent industry's attention to 100GbE technology, Schaeffer said that Cogent "will continue to pay attention to those cost-effective network expansion methods". He also said that since "many of the company's equipment still have spare capacity", it is reasonable to deploy more 10Gbit/s wavelengths. However, Schaeffer said that once the spare capacity was exhausted, Cogent would weigh its options again. Of course, no matter which technology is selected, Cogent's principle is to try to reduce the "net cost of each transmission".
Schaeffer explained that the main investment in running a three-layer network like Cogent is not in optical transmission, but in the routing layer, so it is necessary to carefully evaluate the cost of router interfaces. In the long run, he believes that the industry may adopt 100G technology directly instead of 40G technology based on SONET structure. He also reminded that the SONET interface has been much more expensive than the Ethernet interface in history.
"It is very meaningful to evolve to 100G interface." He said, "At that time, we can achieve three things by obtaining higher bandwidth from a router: using wider spectrum resources, using the entire C and L bands on a router, and using smaller channel spacing in this band."
200GHz channel spacing is common in the first generation DWDM system. Later, it gradually evolved to 100GHz. Now, 50GHz has become the recognized standard interval. The network capacity can be further improved by reducing the channel spacing to 25GHz. He acknowledged that once ITU standardized the 25GHz channel spacing, more advanced modulation methods capable of supporting 100Gbit/s throughput would be needed. "We will need more flexible forward error correction technology and fiber that can solve the PMD problem (polarization mode dispersion). Both are indispensable.
Originated from Ethernet
Cogent uses Ethernet interface types to classify its products, including high bandwidth Internet access services that are directly provided to users of large apartment buildings, such as co renting, and service providers that use Cogent data centers and operator facilities. So far, Cogent claims that it has more than 12300 collective users, accounting for more than 15% of Internet traffic.
Schaeffer explained that Cogent was established based on the principle that "the architecture of the Internet cannot be estimated". He said that in 1999, there were only 200 backbone networks in the world, and the average price per megabyte of bandwidth was about 300 dollars. "At that time, the bandwidth that users bought from operators was actually used to carry telephone services, and only the excess bandwidth would be allocated to IP services," he recalled.
Schaeffer believed that the operators at that time all made their fortunes from telephone companies. They regarded the Internet as a troublesome thing. It would consume a lot of network resources and generate only a small amount of income. "We believe that although the Internet may not be the most effective network, it can indeed deliver services with guaranteed quality, at least better than those overestimated network technologies." He said, "We also believe that Internet technology is inherently cheap and high-quality. It can greatly reduce the cost of wired communication, and will certainly become the most mainstream network technology."
Cogent understands that in today's competitive market, only by providing the most competitive price can we gain a larger market share. At present, the price of one megabyte bandwidth is 10 dollars. Schaeffer said that Cogent's main product is the 100Mbit/s proprietary Ethernet access service, which costs $1000 per month. All its products are Ethernet interface, and can access the Internet immediately without any local loop.
Schaeffer explained that the company's ability to set such a competitive price for Ethernet business is entirely due to the effectiveness of the background management system/operation support system, a stable sales system based on the price system, and a more balanced balance of assets and liabilities than competitors. Before the telecom bubble burst, Cogent's assets increased to 500 million dollars, which is still a long way from the goal of 2 billion dollars. In the following years, Cogent acquired 13 companies with an initial capital of $14 billion and fixed assets, infrastructure and equipment of $4 billion. Cogent only spent 60 million dollars to get this part of assets.
Today, this approach is still the cornerstone of corporate strategy. According to the latest revenue statement, Cogent has acquired six data centers located in Atlanta, Chicago, Dallas, Los Angeles, Miami and Washington, D.C., with a total value of 60 million dollars, without spending a penny, by undertaking debt. These data centers cover about 38000 square feet, so the total number of Cogent's data centers has reached 34, accounting for 300000 square feet.
