Internet service provider Level 3 dropped its peering arrangement with Cogent on October 5, demanding a hosting fee for the service of connecting their root networks. Cogent argued that as equally sized companies they were sharing the bandwidth load and did not need to pay. Level 3 is a tier 1 carrier, meaning that it controls part of the central ring of Internet servers that connect millions of servers, users, and secondary ISPs around the world. Other tier 1 ISPs include AT&T, Sprint, and MCI. Cogent is a tier 2 carrier with many clients, aspiring to become tier 1 through peering arrangements such as the kind it had made with Level 3.
As a result of Level 3's depeering, some customers of both companies experienced dropped connections. However, most consumer ISPs and college networks are "multihomed", and thus could connect through separate lines to both companies. Notably, the American ISP Roadrunner was only connected through Level 3, causing problems for home customers through most of October 5 and 6. Cogent offered a year of free hosting for any Level 3 customer who lost access to servers hosted through Cogent.
As of October 7th the connections seem to be restored.
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Internet backbone hosts feud, disconnecting users