The following is copied from a previous Cogent/Spint debacle posting:
Just like what happened with Level(3) a few years ago.
Cogent's history in the ISP market has been absolutely horrible. They came in to town as the Walmart of ISPs, investing in a huge new super-efficient backbone infrastructure doing everything it could to cut costs so they could offer insane deals to their customers. They were running 10Gigabit connections using existing fiber and brand new equipment. They had no 'legacy' hardware.
The hosting industry bit into the Cogent game when they had customers running multimedia sites that needed tons of bandwidth (see: porn) and were tired of paying insane rates per mbps when Cogent had this brand new network with tons of capacity.
But Cogent wasn't in the 'settlement free interconnect' game yet, they were paying for bandwidth themselves. So they went out and purchased a few ISPs that already had settlement free interconnects. The agreements are already in place, so it was a big win situation for them. But these agreements almost always come with the term that you must give as much as you receive (so you need to have a balance between hosted sites and end users.) Cogent didn't have end users, they had servers.
Think of it this way: I am an apartment complex and I have an agreement to mow my neighbor's lawn and in exchange he shovels my sidewalk. It uses approximately the same amount of work. Now imagine my neighbor and all of his agreements are bought by the local golf course. Now the golf course now expects me to mow the entire course because the agreement was that they would shovel and I would mow. Cogent was the golf course, I am an ISP.
Now in my apartment I house a bunch of golfers once I say "screw this, figure out your lawn situation yourself" the course says "ok, well, I guess your tenants are going to have to go without golf." What the hell am I to do now? Mow this golf course to keep my tenants happy?
Finally I come to an agreement, the golf course has to pay me a small amount and I will mow their grass. Everything seems OK, but then the golf course gets in to a bit of trouble and all of a sudden decides "OK, well... he doesn't want his tenants to go without golf so he will probably keep mowing our grass even if we stop paying him." Here we are again, I'm in an impossible situation because I really care about my tenants but man, I just cannot mow an entire golf course all by myself. So I send the golf course warnings after warnings, and after I reach a tipping point I just say "GFY, I'm not mowing your course anymore." I stop mowing it, and the golf course says "IT IS TOTALLY HIS FAULT THAT YOU CANNOT PLAY GOLF!!!"
Right now a lot of ISPs can hit Cogent's old pricing (and Cogent just cannot go any lower than they already are) so a lot if ISPs will just pass on Cogent and go for someone with a better record.
There is a lot more to the story that we don't know about, and since these agreements are generally done under a NDA we will never know for sure what exactly is happening at Cogent.
Just a FYI: I work for a hosting company that has had some dealings with Cogent in the past.