Going against the grain: Cogent teams with Cisco for dedicated optical network

Service provider trends usually are easy to spot, but in the case of Cogent Communications, the carrier appears ready to do an about-face. Instead of offering all services to all customers, Cogent is focusing on delivering high-speed Internet traffic to multitenant commercial buildings in major cities.

On March 7, Cogent and Cisco Systems will announce their plan of attack for the new network. Under a deal to be unveiled at the Optical Fiber Conference in Baltimore, Cogent will spend $280 million on its planned long-haul OC-192 dense wave division multiplexing all-optical nationwide backbone.

"We are building this with a singular focus in mind," said Dave Schaeffer, CEO of Cogent. "It will be built as an end-to-end IP-based network dedicated purely for Internet access."

While most service providers look to offer a variety of services over their networks, Schaeffer believes that by staying focused on Internet access and realizing the cost-efficiencies of a facilities-based network, the model becomes profitable and valuable.

Traditionally, as ISPs have built their networks, they have rented transport services from circuit-switched providers and have overlaid their data networks on top of those older networks. That creates a dual hierarchy and architecture that is more expensive to install and maintain, Schaeffer said. "We have taken a very different approach by going to the facilities-based level," he said.

Cogent recently secured about 12,300 miles for its national backbone, which will consist of a single fiber strand. For metropolitan connectivity, Cogent revealed a deal last week with Metromedia Fiber Network to purchase single-fiber rings in 50 major markets.

It is an aggressive plan, but some question whether it will pay off. "He who brings the broadband pipe to the business customer isn't necessarily the big money winner," said Kevin Mitchell, service provider networks analyst at Infonetics Research. Connecting with fiber will make upgrades faster and easier, he said, noting that because taking fiber to buildings is costly and difficult, few service providers do it.

Schaeffer disagrees. "The unique combination of these technologies has allowed us to drive the cost per bit mile down." But the service won't be available everywhere.

Cogent then will deploy four technologies end-to-end that it claims will drive down the cost per pit mile by more than a factor of a 100 over existing networks.

"We are not all things to all people, and we do not offer our service ubiquitously," Schaeffer said.

The company plans to offer a 100 Mb/s non-oversubscribed Internet access service for $1000 per month. "That equates to $10 per megabit, per month," Schaeffer said.

Service providers typically providing T-1 service at the high end of $1500 to $2000 per month are usually oversubscribing, so the actual throughput is about half, he said.

"When I first met [Schaeffer] and listened to what he was trying to do, frankly, I was skeptical because my first response was, `what about all the other services?'" said Carl Russo, group vice president of Cisco's optical networking group and former CEO of Cerent. "But the technology has moved to a point where someone like [Schaeffer], with his experience, can look at these products and put them together to deliver this Internet hype we have all been talking about for so long."

The cost-efficiencies aren't immediate because "we are not giving away the equipment," Russo said. "It requires an entirely new architecture for your network to get at that cost structure." Cisco will supply its ONS 15454, ONS 15800 and the 12016 Gigabit Switch Router for the build.

"The whole notion and the vision that we are pursuing is to try and build what I call Internet scale, carrier class optical network," said Russo.

Russo and Schaeffer cited further cost benefits of using the Cisco product, noting that the Cogent backbone will scale 64 times without additional advances.

By using the core routing technology of the GSR 12016, Cogent can provide protection of a national network at Layer 3 rather than protecting at the Sonet layer.

"There has never been a network protected at Layer 3," Schaeffer said. "We have built a network optimized for data, not voice."

With the ONS 15454 in each metro ring, the company can direct 5 Gb/s of traffic, or two OC-48s, into each building. Layer 3 routers inside the buildings will act as multiplexing devices and protect the local rings again at Layer 3.

Cogent plans to layer other services on top through partnerships with application service providers, Schaeffer said.