Telia Internet is controlled by Swedish telecom giant Telia A.B., which reportedly maintains in
excess of $100 million in assets so the transaction is expected to sail
through regular federal reviews.
Cogent Communications Inc.
ran the price of the sale up from its estimated $15 million value in a
bidding war with Telia. Cogent wanted desperately to own a backbone in
support of its multi-tenant building Internet operations. The firm is
currently constructing its own backbone from dark fiber leased
predominantly from Metromedia Fiber
The AGIS auction was conducted in the U.S.Bankruptcy Court for the Eastern
District of Michigan over the past two months while Telia and Cogent
battled with bids for the defunct backbone provider.
At issue are AGIS’s lucrative peering arrangements and interconnection
agreements, which may or may not transfer to its new owner. The transfer
question prompted Cogent to forego its attempt to purchase the network.
Established in 1994 by Phillip J. Lawlor, the small backbone operator
provided network services to more than 300 regional Bell operating centers,
content providers, large corporations and independent Internet service
Although the company had established strategic relationships with
successful telecommunications companies like ALLTEL Corp. (AT)
and Qwest Corp.(QWST), the financial infusions were not enough to save the oldest Internet
backbone from financial decay. The firm filed for Chapter 11 reorganization
early in March while it sought relief from its creditors.