Fri, Oct. 16, 5:07 PM
- The FCC is probing four companies -- AT&T (T +1%), Verizon (VZ +0.1%), CenturyLink (CTL -0.7%) and Frontier Communications (FTR -1.9%) -- over terms they set for business broadband, the dedicated mission-critical lines that make everything from schools to ATMs work.
- That's a $20B market, and competitors including Sprint (NYSE:S), Level 3 (NYSE:LVLT) and Cogent (NASDAQ:CCOI), along with Amazon.com and others, are complaining about unfair lock-ups with large early termination fees.
- The FCC has found "potentially unjust and unreasonable practices" that rise to the level of an investigation. It says the four companies it's probing use plans with “a complicated web of all-or-nothing bundling, loyalty and term commitments, complex enforcing penalties” and other provisions, and asked them to respond by Dec. 18.
- In a mailed statement, industry group USTelecom (of which the four companies are members) says the investigation is a "rear-view mirror" approach. “Although the FCC says that it wants to be a data-driven agency, promote facilities-based competition, and incent broadband investment, it just can’t seem to get beyond its telephone-era mindset when it comes to regulating 20th century legacy services," says USTelecom President Walter McCormick.
Thu, Oct. 8, 4:40 PM
- Time Warner Cable (TWC +1.1%) has set a long-term interconnection deal with Cogent Communications (CCOI +1.2%) -- some timely playing nice as the FCC reviews Charter's (CHTR +1.5%) bid to take over TWC.
- Charter has promised settlement-free interconnection in its dealings, and to extend that to TWC systems if the merger goes through, although there are no details whether this deal was settlement-free. But it's that approach that is winning merger support from peering companies like Cogent and Netflix.
- The FCC last month sent a request to TWC for a copy of all interconnection deals (formal or not) struck since Jan. 1, 2013. Complaints about interconnection are actionable under the agency's new regulatory regime.
Fri, Oct. 2, 10:33 AM
- Cogent Communications (CCOI -1.9%) CEO Dave Schaeffer says that net neutrality-focused moves in both the U.S. and the UK -- along with some contemporaneous interconnection deals it made -- have seen its connections on key networks go nearly congestion free.
- Connections to Comcast have freed up, and along with deals with AT&T and Verizon it made around the time the FCC rolled out new rules, those networks have become uncongested as well, he said at Deutsche Bank's conference.
- The company's also pursuing similar deals with a number of providers, including Time Warner Cable, CenturyLink, Orange, Telefonica, and Deutsche Telekom.
- "We are in active negotiations with Time Warner Cable and CenturyLink and we believe we will get deals done based on the threat of litigation under the current regulatory rules," Schaeffer said.
Mon, Apr. 20, 4:09 PM
- Equinix (EQIX +1.6%) should post revenue and EBITDA ahead of Street estimates amid "y/y growth in MRR ... and a secular shift to the cloud," according to Pacific Crest's Michael Bowen and Trevor Upton. It's one of five stocks that Pacific Crest mentioned buying into upcoming earnings in its Q1 Communications Services Preview.
- The stocks all get an Outperform rating from the analysts. Equinix received a $255 price target and the firm "would remind investors that our bull case on shares remains $280." Shares closed today at $239.80 and the firm reports April 29.
- Rackspace (RAX +0.9%) also benefits from shifting business, the firm says: "We believe we are in the early stages of a secular shift from on-premise data centers to hybrid clouds made up of private and public cloud platforms. We believe the company is executing more efficiently and improving its managed service value proposition." Their price target is $58; shares closed today at $52.53 and the company reports May 11.
- SBA Communications (SBAC +1.8%) got a price target of $138 on expectations of strong leasing activity and hearing about positive impact from the FCC's last spectrum auction; it closed today at $121.84 and reports on Friday.
- Cogent Communications (CCOI +1%) received a price target of $45 and closed today at $34.24; it reports May 7. GTT Communications (GTT +1.6%) got a $24 target and closed today at $18.31; it reports May 7 as well.
Thu, Apr. 16, 2:24 PM
- Pointing to declining fee revenues, Off Wall Street has issued a Strong Sell rating on facilities-based Internet provider Cogent Communications (NASDAQ:CCOI).
- The firm says net neutrality regulation (a threat to CCOI and peers) should press revenues, and notes declining fees from clients like direct-peering regular Netflix, as well as Amazon and Microsoft. Off Wall Street sets a $25 price target for the stock.
- Cogent shares are down 2.5% today, to $35.01.
Wed, Feb. 4, 11:42 AM
- Breakdown of FCC Chairman Tom Wheeler's op-ed on net neutrality: "Enforceable, bright-line rules" that ban paid prioritization ("fast lanes") and blocking/throttling of services, including for mobile broadband.
- The investment key for related stocks: "All of this can be accomplished while encouraging investment in broadband networks. ... My proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks. For example, there will be no rate regulation, no tariffs, no last-mile unbundling."
- FCC voting is scheduled for Feb. 26.
- Related stocks: (CMCSA +2.8%); (CVC +2%); (TWC +3.1%); (T +0.6%); (VZ +0.7%); (CHTR +4.3%); (DISH +2.6%); (DTV +1%); (CCOI +3.9%)
Wed, Feb. 4, 11:31 AM
- FCC Chairman Tom Wheeler has released an op-ed hinting at the commission's new stance on net neutrality rule -- and it suggests utility-like regulation for fixed and wireless broadband.
- "This week, I will circulate ... proposed new rules to preserve the Internet as an open platform for innovation and free expression. This proposal is rooted in long-standing regulatory principles, marketplace experience, and public input received over the last several months."
- Wheeler calls directly for Title II authority in "the strongest open Internet protections ever proposed by the FCC."
- Stocks on the move: (CMCSA +3.3%); (CVC +2.9%); (TWC +4%); (T +0.8%); (VZ +0.7%); (CHTR +4.3%); (DISH +3.3%); (DTV +1.2%); (CCOI +4.3%)
Nov. 26, 2014, 11:55 AM
- ZAYO has received 11 bullish ratings on underwriter coverage day, and no neutral or bearish ones.
- Goldman (Buy, $30 target) calls the fiber network owner "a pure-play opportunity on 20%+ secular growth in data traffic expected over the next few years," and thinks the market for fiber infrastructure service can post a 7% CAGR through 2020. "Our [sum-of-the-parts] analysis suggests the market is giving little credit to revenue visibility and incremental margins of the physical infrastructure business."
- "Zayo owns one of the largest collections of fiber in the U.S. and primarily targets customers with heavy and complex bandwidth needs," says Morgan Stanley. "Consolidated adjusted EBITDA margins for Zayo are ~58%, meaningfully higher than its peers due to its focus on the higher margin products like dark fiber (~70% margins) ... Even if individual product margins remain flat, consolidated margins can grow due to a mix shift."
- MS also observes the fiber services market has seen huge consolidation, and that mobile, cloud, and online video traffic growth is boosting demand.
- Zayo now +39% from October's $19 IPO price. Peers Level 3 (LVLT +1%) and Cogent (CCOI +1.8%), for whom many of the bullish arguments for Zayo also apply, are trading higher.
Sep. 18, 2014, 10:00 AM| Sep. 18, 2014, 10:00 AM | Comment!
May 12, 2014, 10:34 AM
- Following a public backlash, FCC chairman Tom Wheeler is backtracking a bit on rule changes (floated last month) that would allow U.S. ISPs to charge content providers for access to a priority "fast lane."
- A new draft of Wheeler's plan seeks comment on whether such arrangements, referred to as "paid prioritization," should be banned. It also states the FCC will scrutinize deals with content providers to make sure non-payers aren't at a disadvantage, prevent ISPs from doing deals with varying terms, and (notably) seek comment on whether broadband should be regulated as a public utility.
- Netflix (NFLX +3.2%), whose bandwidth spend accounts for a sizable portion of its expenses, is higher amid a broader Internet stock rally. The streaming giant has struck direct peering deals with Comcast and Verizon this year, but has also made it clear it's not thrilled with having to make them.
- Cogent (CCOI +2.2%), which provides peering services for Netflix and many others, is also higher. Its shares tumbled after the Netflix-Comcast deal was announced.
Feb. 28, 2014, 2:21 PM
- D.A. Davidson has upgraded Cogent (CCOI +3.3%) to Buy.
- Shares are recouping some of the losses they saw earlier this week in response to Netflix's peering deal with Comcast, which (along with other peering deals being discussed) stands to lower the amount of traffic Netflix hands off to Cogent's network.
Feb. 24, 2014, 6:41 PM
- Verizon (VZ) and AT&T (T) have confirmed that they, too, are talking with Netflix (NFLX +3.4%) about direct peering deals. Verizon CEO Lowell McAdam says his company's talks with the streaming giant have been going on for about a year.
- Netflix shares closed the day with strong gains, as analysts argued direct peering deals such as the one just reached with Comcast could end up having a neutral or even positive impact on Netflix's bandwidth costs, given the company will no longer have to pay intermediaries such as Cogent (CCOI -6.8%).
- Dan Rayburn: "It should actually be cheaper for Netflix to buy direct from Comcast, and they also get an SLA, which also improves quality ... While I don’t know the price Comcast is charging Netflix, I can guarantee you it’s at the fair market price for transit."
- Others aren't convinced direct peering deals are a positive. The Washington Post: "Cogent has many competitors. Verizon's FiOS service does not. If companies like Cogent are squeezed out of business, it will make these already powerful network owners even more powerful."
- GigaOm: "These agreements aren’t transparent ... rates could go up over time, and they essentially act as a tax on the Internet."
Oct. 15, 2013, 9:29 AM
- Teradata (TDC) has been cut to Neutral by Credit Suisse and Sterne Agee, and to Equal Weight by Morgan Stanley, following its Q3/2013 warning. Shares -14.9% premarket.
- Dassault (DASTY.PK) has been cut to Underweight by HSBC a day after the company reported weaker-than-expected preliminary Q3 results and cut its full-year guidance. Shares -3.2% in Paris.
- FireEye (FEYE) has received three bullish coverage launches and four neutral ones on underwriter coverage day. Shares +0.6%.
- Texas Instruments (TXN) has been upgraded to Neutral by Susquehanna. Shares +0.5%.
- Cogent (CCOI) has been upgraded to Buy by Citi.
- Veeco (VECO) has been cut to Market Perform by Oppenheimer.
- Marvell (MRVL) has been started at Outperform by Raymond James.
Sep. 18, 2013, 9:40 AM
- Nokia (NOK +3.3%) has been upgraded to Outperform by Credit Suisse after being upgraded by the firm to Neutral two weeks ago. Plenty of other firms have also upgraded (I, II) Nokia since the Microsoft deal was announced.
- ServiceNow (NOW +3.5%) has been upgraded to Overweight by Morgan Stanley.
- Maxwell (MXWL +8.6%) has been upgraded to Overweight by Piper.
- Intuit (INTU -1.5%) has been cut to Underweight by Morgan Stanley.
- AVG (AVG +3.1%) has been started at Buy by Nomura.
- Cogent (CCOI +0.6%) has been started at Outperform by Pac Crest.
- Cognizant (CTSH +2.7%) has been upgraded to Overweight by Barclays.
Feb. 27, 2012, 3:27 PM
Jan. 20, 2012, 11:07 AM
Cogent Communications Holdings Inc is a facilities-based provider of Internet access and Internet Protocol communications services. It offers on-net Internet access services through its facilities.
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