Verizon Communications Inc. (NYSE:VZ) has decided to sign a network traffic deal with one of its long-time antagonists named Cogent with an objective to avoid a possible conflict in an area that attracts a close eye from regulators. It’s a multiyear interconnection deal, which will allow Verizon Communications to swap traffic with Cogent Communications Holdings Inc. As per the reports, Cogent is one of the leading internet wholesalers in the world.
Implications Of This Deal:
Verizon Communications has signed this deal within a week of another agreement that it signed with Level 3 Communications Inc. With the help of these two deals, Verizon will take an edge over its rivals in the same industry. The company was involved in a few high profile fights last year and also made it to the headlines of various leading dailies after it forced to be paid for heavy traffic.
Both Level 3 and Cogent provide services to some of the largest media companies in the world such as Netflix Inc. Both of them have accused Verizon and a few other home internet service providers on multiple occasions for doing nothing to handle the excessive Internet traffic on their networks. Due to this inconvenient standoff in 2014, millions of Internet users had to suffer from slow services.
While signing a new agreement with Cogent, Verizon Communications Inc. (NYSE:VZ) has clearly stated that its newly signed deals will address all the issues that caused problems in the past. The primary objective of these deals will be to run data services effectively. Both Cogent and Level 3 will be able to serve their online video clients effectively after this agreement.
The current deal comprises of a few links of Verizon’s content delivery system that has been creating a buzz around with a lot of big media customers lately. The market experts call it a positive step and hope that it will improve overall internet service quality.