New Verizon Deals: Could Peering Disputes Be On the Way Out?

Three months after the Federal Communications Commission threatened closer oversight of Internet interconnection agreements as part of its Open Internet order, Verizon has reached traffic exchange agreements with two companies that previously were the focus of high-profile interconnection disputes. On April 23, Verizon noted that it had reached an Internet interconnection agreement with Level 3 and on May 1st the company announced a similar agreement with Cogent Communications. Both Level 3 and Cogent provide Internet connectivity to content providers -- and because companies in that business tend to deliver more content to broadband providers such as Verizon than they receive from those providers, Verizon had argued that companies should pay for any traffic imbalance. Neither announcement details the terms of the settlements. But Cogent’s CEO Dave Schaefer reportedly said that his company won’t have to pay Verizon for exchanging traffic. Neither Level 3 nor Verizon would answer the same question.

Companies like Verizon that have resisted free peering agreements with companies like Level 3 and Cogent may be in a weaker bargaining position now that the Federal Communications Commission has reclassified broadband as a Title II telecommunications service, and has said it will hear complaints about Internet interconnection and take enforcement action if necessary. Retail broadband providers aren’t giving up without a fight however. Several broadband providers and provider associations have sued the FCC over the Title II decision and on Friday, five broadband provider associations petitioned for a stay on broadband reclassification. In their arguments, USTelecom, AT&T, CenturyLink and others expressed concern about increased FCC control over Internet peering agreements as a result of broadband reclassification.