Washington, D.C. — December 8, 2015 — Cogent Communications Holdings, Inc.’s (NASDAQ: CCOI) principal operating subsidiary, Cogent Communications, Inc., one of the largest Internet service providers in the world, today sued Deutsche Telekom A.G. in U.S. federal court in Virginia for breach of contract. The lawsuit is based on Deutsche Telekom congesting its Internet connections with Cogent. “Deutsche Telekom has interfered with the free flow of Internet traffic between Cogent customers and Deutsche Telekom customers by refusing to increase the capacity of the interconnection ports that allow the exchange of traffic,” said Robert Beury, Cogent’s Chief Legal Officer. Mr. Beury added: “The congestion results in degraded service to customers of both companies. Deutsche Telekom is using its market power as the dominant provider of residential Internet service in Germany in an attempt to extract a toll, directly or indirectly, from companies in the U.S. that provide Internet services that Deutsche Telekom’s customers want to use. This particularly harms smaller U.S. companies that cannot afford to locate Internet servers in Europe where they can directly connect to Deutsche Telekom and avoid the congestion.”
The graphs show the flow of traffic between the two networks at interconnection points in Frankfurt, Germany and Ashburn, Virginia. Points where the blue line approaches the top of the chart indicate times when traffic congestion is occurring and packets of data are being dropped. Normally, capacity would be increased so that traffic rarely exceeds 70% of capacity (i.e. 14 Gbps in Frankfurt and 7 Gbps in Ashburn, VA).
Cogent is represented by Boies, Schiller, and Flexner LLP. Robert Cooper, the partner at the firm in charge of the litigation said, “Deutsche Telekom, by turning its back on its historical course of dealing with Cogent and industry norms, has violated its contractual obligations to Cogent and its obligations as a participant in the Internet.” Cogent’s lawsuit seeks an order from the court forcing Deutsche Telekom to increase its capacity at interconnection points to alleviate the congestion, as well as damages.
