I know some people think there is too much Cogent bashing on this board, but I found this article to be an excellent analysis of Cogent's situation:

http://www.lightreading.com/document.asp?site=lightreading&doc_id=13641

This sounds like the "strategy" of half the failed dot-coms.

This is why my new servers are in a local colo, relying on bellsouth & at&t bandwidth (and some others) and not a single cogent fiber anywhere to be seen. I plan on being around a while, and I can't look at Cogent and their strategy and make myself believe they will be here for the long run, call me pessimistic.

One slip from Cogent, and they die.

All that article says is that cogent is like every other backbone provider out there. They spend more then they make which is nothing new.

Originally posted by Dilhole
All that article says is that cogent is like every other backbone provider out there. They spend more then they make which is nothing new.

You are partially right. All telecom carriers have debt, but if you look at AT&T, Sprint and WorldCom the debt to earnings ratio is much smaller than the debt to earnings ratio of Cogent, and some of these other carriers ( ie Williams, MFN, and even Qwest to some extent).

For example, WorldCom has about $10B in long-term debt, but annual revenues of $24B, and is profitable from year to year. AT&T and Sprint are in similar situations. In the long term this means their debt is more manageable than Cogent's debt.

I just checked AT&T's year-end report and they reported $52.5B in earnings against $30B in debt, and AT&T was also profitable last year, with $2B in cash on hand.

Contrast this with $3M in revenue and $564M in debt, with only $50M in the bank.

Oh my God, that's some stunning news! :eek:

How do you tell if a host is using Cogent? Running traceroutes on samspade.org routinely brings up Cogent as part of the hop sequence. Does this mean a host is on Cogent?

Are rackshack people on Cogent?

I want to see if anyone answers carrotweb's question.

[ The only way I know how to monitor a thread (other than manually) is to post to it. Is there another way? ]

ciaio:dunce:

Originally posted by uuallan
I just checked AT&T's year-end report and they reported $52.5B in earnings against $30B in debt, and AT&T was also profitable last year, with $2B in cash on hand.

Contrast this with $3M in revenue and $564M in debt, with only $50M in the bank.

uuallan, where do you check all these? Let me know :)

cheers,
:beer:

Originally posted by dektong

uuallan, where do you check all these? Let me know :)


Dude -- only one of us can be a cub reporter :), you have to learn the secret handshake to find this information out :D.

Actually, all publicly traded companies, which now includes Cogent, have to disclose full financial information, every quarter. Since most telecom carriers are publicly traded the information is readily available on their web site -- usually in a section marked "Investor Relations" or something like that.

For AT&T:

http://www.att.com/news/item/0,1847,4191,00.html

For Sprint:

http://144.226.116.29/PR/CDA/PR_CDA_Press_Releases_Detail/1,1579,5241,00.html

and so on...you can also do this to check on the health of larger webhosts like RackShack, Interland, etc. Although, be aware that in the press releases (which is what I have linked here) the companies will spin the results in the best possible light :). For a real in-depth analysis you would have to download the full report and study it.

Originally posted by uuallan


You are partially right. All telecom carriers have debt, but if you look at AT&T, Sprint and WorldCom the debt to earnings ratio is much smaller than the debt to earnings ratio of Cogent, and some of these other carriers ( ie Williams, MFN, and even Qwest to some extent).

For example, WorldCom has about $10B in long-term debt, but annual revenues of $24B, and is profitable from year to year. AT&T and Sprint are in similar situations. In the long term this means their debt is more manageable than Cogent's debt.

This is correct, but what was their debt:revenues when they started? Growth costs money which cogent has been doing for the past year building their network.
Dont get me wrong, I know cogent has money problems, but so does/did every other provider when they started.

Yeah, I read that article earlier today and was not surprised. It will be interesting what will shake out with Cogent. I think we are going to see a new rash or Chap 11's in the next couple of months.

Originally posted by carrotweb
How do you tell if a host is using Cogent? Running traceroutes on samspade.org routinely brings up Cogent as part of the hop sequence. Does this mean a host is on Cogent?

Are rackshack people on Cogent?

Correct, samspade, or another traceroute tool, will show you the route to a host. Because Cogent does not provide long haul service to other carriers, if you see Cogent in the path to a host, they are probably running off Cogent bandwidth.

That does not mean that Cogent is their only provider, but Cogent is most likely their primary provider.

RackShack uses many different providers, but they appear to put a heavier weight on the Cogent link, so the vast majority of their traffic traverses Cogent. Please note: I cannot speak authoritatively about RackShack's network, my statement is made based on observation of external traffic to RackShack.

Originally posted by uuallan
I just checked AT&T's year-end report and they reported $52.5B in earnings against $30B in debt, and AT&T was also profitable last year, with $2B in cash on hand.

Contrast this with $3M in revenue and $564M in debt, with only $50M in the bank.

You forget to mention the many other services they offer also which account for much of this revenue and debt.

Originally posted by RackMy.com
...I think we are going to see a new rash or Chap 11's in the next couple of months.

Can anyone say level3....or williams.

Originally posted by Dilhole


This is correct, but what was their debt:revenues when they started? Growth costs money which cogent has been doing for the past year building their network.
Dont get me wrong, I know cogent has money problems, but so does/did every other provider when they started.

These larger providers had other revenue to offset their network expansion -- mostly phone revenues. Cogent does not have that. Understand that the rash of chapters 11s we are seeing, or will see soon (Yipes, Adelphia, Aleron, MFN, Williams, XO, etc) are coming from companies that didn't have other revenues to help offset their debt. No one is investing in telecommunications companies at this point, which means that if Cogent runs out of money, which they will in the next 18 months, there won't be any investors coming to rescue them.

Does that mean that Cogent won't exist in 18 months? Probably not, they will probably be purchased for pennies on the dollar by an ILEC (the only ones with any money right now). Since ILECs don't worry too much about being competitive they will jack the price of Cogent bandwidth so it is in line with their own overpriced offerings.

Of course, keep in mind, IANAA, I'm just speaking based on my experience, and what I have seen happen in the past (ala BBN --> GTE --> Bell Atlantic).

Originally posted by Dilhole

You forget to mention the many other services they offer also which account for much of this revenue and debt.


No I didn't, you just didn't read that post yet :D.

Originally posted by uuallan


These larger providers had other revenue to offset their network expansion -- mostly phone revenues. Cogent does not have that. Understand that the rash of chapters 11s we are seeing, or will see soon (Yipes, Adelphia, Aleron, MFN, Williams, XO, etc) are coming from companies that didn't have other revenues to help offset their debt. No one is investing in telecommunications companies at this point, which means that if Cogent runs out of money, which they will in the next 18 months, there won't be any investors coming to rescue them.

Does that mean that Cogent won't exist in 18 months? Probably not, they will probably be purchased for pennies on the dollar by an ILEC (the only ones with any money right now). Since ILECs don't worry too much about being competitive they will jack the price of Cogent bandwidth so it is in line with their own overpriced offerings.

Of course, keep in mind, IANAA, I'm just speaking based on my experience, and what I have seen happen in the past (ala BBN --> GTE --> Bell Atlantic).

Yup I agree. Interesting times ahead for all the providers thats for sure. And yeah some company can pickup a backbone for peanuts on the dollar for what it took to do the initial build out. Same goes for datacenters, why build you can buy premade for a whole lot less :)

Originally posted by uuallan
Dude -- only one of us can be a cub reporter :), you have to learn the secret handshake to find this information out :D.


Hey ... you are daman, my great allan :D You are the cub reporter of WHT!!! Thanks for the link!

PS: Allan, get on your AIM ... wanna chat with you ;)

cheers,
:beer:

Originally posted by dektong

PS: Allan, get on your AIM ... wanna chat with you ;)


I'm on, but not for too long, I am late and I don't think my publisher is going to fall for the "I forgot to add the attachment trick" again :D.

Allan, thanks a lot for the free psychic reading! :D

cheers,
:beer:

cogent lost $64.78 per share last quarter.... yup im gonna rush out and buy that stock.

-Brendan