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Cogent Communications Group, Inc. (CCOI)

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  • Fri, Feb. 27, 6:37 PM
    • Fresh off their vote for re-regulation of Internet transmissions, the five FCC commissioners will be spending mid-March on Capitol Hill answering to the GOP Congress.
    • The House Energy and Commerce Committee is holding its hearing March 19, a day after the members are scheduled with the Senate Commerce Committee.
    • The chairmen of the two committees, Greg Walden and John Thune, are backing a bill that would reverse the FCC's Title II reclassification (treating Internet providers more like utilities) and substantively narrow its approach to ensuring net neutrality.
    • Following the 3-2 vote, major carriers indicated their strategy would be twofold: Lawsuits (CMCSA, T, VZ, CHTR worried about "years" of litigation); and legislative action to undo the move, with a cooperative congress apparently ready to act.
    • Other related stocks: CVC, TWC, CTL, FTR, ELNK, DISH, DTV, CCOI
    | 66 Comments
  • Thu, Feb. 26, 1:39 PM
    • In the wake of the FCC's new regulations, key telecom and Internet stocks are tracking mostly where they were prior to the vote -- in part due to the fact that the vote's likely outcome was baked in, but also because details (including any late changes) are yet to be published.
    • The FCC majority must review and respond to the dissenters before publishing the result, which they will provide on the Web when it's ready.
    • Key stocks largely unchanged from the morning: Comcast (CMCSA -1.2%), Time Warner Cable (TWC -1.9%), Cablevision (CVC +1.3%), Charter (CHTR -1%), Centurylink (CTL +0.4%), Frontier (FTR +0.9%), Cogent (CCOI -1%).
    • AT&T (T +0.9%); Verizon (VZ +0.4%); Dish Network (DISH -0.6%); DirecTV (DTV +0.1%).
    • Netflix (NASDAQ:NFLX) -- whose traffic is such that the regulatory difference in its delivery costs may mean as much as $100M/year -- is up 1.6%. Interconnection fees may yet need some clarification.
    • For its part, Verizon (NYSE:VZ) uses its old-fashioned typewriter to put out a press release for "Feb. 26, 1934" warning that rules "written in the era of the steam locomotive and the telegraph" won't work today.
    • Speaking of Verizon: Next up will be lawsuits. Courts invalidated the FCC's last two attempts at net neutrality, most recently in January 2014.
    • Wheeler statement on vote
    • Previously: Report: AT&T, Verizon will sue FCC immediately after reclassification (Feb. 04 2015)
    | 42 Comments
  • Thu, Feb. 26, 1:01 PM
    • The FCC approves tough net neutrality restrictions on the Internet -- reclassifying broadband services under Title II of the Telecommunications Act -- on a party-line vote of 3-2.
    • Republican commissioners Ajit Pai and Michael O'Rielly opposed the measure.
    • To open applause, Chairman Tom Wheeler said the action is an "irrefutable reflection of the principle that no one -- whether government or corporate -- should control free and open access to the Internet."
    • Pai thinks the result of reclassification will be even less competition, and calls the rules a "Kingsbury Commitment for the digital age ... If you loved Ma Bell in the 20th century, you will love Pa Broadband in the 21st."
    • Prior to the key net neutrality vote, the commission voted along the same party lines to pre-empt laws in North Carolina and Tennessee that put restrictions on municipal broadband initiatives.
    • Related stocks: CMCSA, CVC, TWC, CTL, CHTR, FTR, T, VZ, NFLX, ELNK, DISH, DTV, CCOI
    • Previously: FCC begins convening for historic net neutrality vote (Feb. 26 2015)
    | 62 Comments
  • Thu, Feb. 26, 10:29 AM
    • The FCC is ready to begin a meeting at which it plans a historic vote on re-regulating Internet providers, though a bit of the drama has gone out of the vote as Congressional Republicans yesterday conceded approval is likely.
    • That's not to say some things aren't still in flux this morning: Democratic commissioner Mignon Clyburn is pressing Chairman Tom Wheeler for some more clarity on one part of the proposal, and Google lobbying on the "sender pays" issue has apparently moved Wheeler to last-minute revisions.
    • The vote is expected to end 3-2 in favor of Title II regulation, along party lines.
    • Republican commissioner Ajit Pai continues his full-court press against the rules and will hold his own response press conference after the meeting.
    • Meanwhile, Wheeler's proposal may not go far enough to achieve its goals, if key loopholes remain available to service providers.
    • The FCC will start meeting at 10:30 a.m. ET, and will first vote on whether to pre-empt laws in North Carolina and Tennessee restricting municipal broadband.
    • Related stocks: CMCSA, CVC, T, VZ, TWC, NFLX, CTL, CHTR, FTR, ELNK, DISH, DTV, CCOI
    | 25 Comments
  • Thu, Feb. 26, 2:50 AM
    • The FCC is expected to approve Chairman Tom Wheeler's proposed "net neutrality" rules today, which will regulate broadband providers more heavily than in the past and restrict their power to control download speeds on the web.
    • The vote comes after a year of jostling between net neutrality advocates and cable and telecom companies, which are expected to launch a volley of lawsuits should the new rules be passed.
    • Related stocks: CMCSA, CVC, T, VZ, TWC, NFLX, CTL, CHTR, FTR, ELNK, DISH, DTV, CCOI
    | 66 Comments
  • Wed, Feb. 25, 7:08 AM
    • Cogent Communications (NASDAQ:CCOI): Q4 EPS of -$0.01 misses by $0.05.
    • Revenue of $96.75M (+7.7% Y/Y) misses by $0.95M.
    • Press Release
    | Comment!
  • Tue, Feb. 24, 5:30 PM
  • Tue, Feb. 24, 3:59 AM
    • Republicans are increasing pressure on the FCC to delay Thursday's net neutrality vote, saying the public needs time to see and review the plan.
    • The proposal has been subject to heated battle since Chairman Tom Wheeler proposed reclassifying broadband from a lightly regulated information service to a more strictly overseen telecommunications service.
    • Supporters of the approach say that without such rules, broadband companies could charge tolls to websites for their fastest speeds, while critics say the plan would give the agency the authority to regulate pricing.
    • Related stocks: CMCSA, CVC, T, VZ, TWC, NFLX, CTL, CHTR, FTR, ELNK, DISH, DTV, CCOI
    | 32 Comments
  • Mon, Feb. 9, 11:32 AM
    • Cogent Communications (CCOI -1.3%) is commencing an offering of $245M in senior secured notes due 2022.
    • The notes are expected to be guaranteed by Cogent on the closing date.
    • The company expects to to appply proceeds to finance redemption of $240M in existing senior secured notes due 2018.
    | Comment!
  • 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%)
    | 5 Comments
  • 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%)
    | 20 Comments
  • 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.
    | 1 Comment
  • Nov. 7, 2014, 7:06 AM
    • Cogent Communications (NASDAQ:CCOI): Q3 EPS of $0 misses by $0.03.
    • Revenue of $95.7M (+9.0% Y/Y) misses by $1.29M.
    • Press Release
    | Comment!
  • Nov. 6, 2014, 5:30 PM
  • Oct. 31, 2014, 12:29 PM
    • In a compromise proposal that could give both ISPs and net neutrality proponents much to complain about, the FCC plans to lightly regulate consumer broadband services - they'd be classified as a "retail" service - but also tightly regulate connections between sites and ISP networks under common carrier (i.e. Title II) rules originally created for phone networks.
    • The back-end rules could go over well with Netflix (NFLX +2.7%), which has reluctantly struck paid peering/interconnection deals with major ISPs to guarantee high streaming speeds. Reed Hastings has been vocally calling for tougher neutrality rules. Cogent's (CCOI +0.8%) shares tumbled after Netflix struck its first paid peering deal (with Comcast).
    • The last-mile rules, however, appear to leave the door open for ISPs to charge Internet companies extra for paid priority/fast-lane access, an idea previously floated by FCC chairman Tom Wheeler. Comcast, Verizon, and AT&T recently declared they have no plans to strike fast-lane deals.
    • Neutrality proponents question the ability of a hybrid proposal to withstand legal challenges. "The FCC would lose in court a third time," says Stanford law prof. Barbara van Schewick.
    | 3 Comments
  • Sep. 18, 2014, 10:00 AM
    • JPMorgan has started coverage on Level 3 (LVLT +2.7%) with an Overweight and $55 target, and Cogent (CCOI +1.7%) with an Overweight and $41 target. Shares of both fiber network owners are higher.
    • Level 3 caught a Macquarie upgrade in late August. Shares now +42% YTD.
    | Comment!
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Company Description
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.