The Facts About Business Internet Costs
The whole internet pricing thing doesn’t make any sense to most businesses. That too often includes those who should understand it better. IT support staff, the internal “IT guy” or IT cadre. But the key person who needs education is the decision maker. That person who will ultimately decide which solution your company will choose. This is for “them”.
Remember that complex network services are like a Trojan horse. If the boss lets in a “fix” because the price seems good…staff have to deal with the consequences.
Be careful… you are being tempted by the siren song of the price. Wooooooo ~~~ low price. Wooooo ~~~ increased speed. Uhhhh Ohhhh ~~~ long-term contract. Uhhhh Ohhhh ~~~ bad service, support, maintenance and billing! And Uhhhh Ohhhh ~~~ time to update your summary.
Understand, for example, that a T1 connection typically has a very strict SLA (Service Level Agreement), one that cable and DSL don’t. With the number of T1 circuits out there and the number of years they’ve been around (and the number of smart connectors left on customer sites), you’re likely to be frustrated that it’s significantly more expensive to install a T1 than it is for install a DSL circuit.
You might even believe that if the actual physical costs (barring repeated for long distances) are basically the same as DSL, then if you relax the SLA, why can’t circuit T1 be used to deliver internet where DSL won’t go? ?
You’re also probably confused because you can get a 15/3 business circuit from a cable provider for around $150/month and the same circuit at home is around $80. There’s another catch. Don’t get sidetracked trying to compare a commercial line to a residential circuit. That’s like comparing apples and watermelons.
Is the increased cost of a T1 circuit (or DS3 bandwidth, etc.) a matter of state mandated fees? Is it about ISPs protecting their profits with an air of exclusivity?
No… now you’re accepting the conspiracy theory excuse.
This can be especially migraine-inducing if your business is one of those bandwidth orphans, stuck in Boonieville, any state in the US. You can’t use satellite without cutting down big trees. You can’t get reasonable cell phone coverage even if you’re willing to live with the 5Gb limit. You don’t get WiFi and there’s no DSL. All you have available is 45K dial-up. Now that would really suck.
We’ve been waiting for over three years for BPL (bandwidth over power lines), which is apparently still a work in progress. For example, let’s say you were quoted $850 last year for a complete T… with some less competitive prices above $1000.
We may also be bouncing signals from satellites, trying to run IP over high-powered power lines, and bouncing wireless signals from multiple towers, when the answer to rural internet coverage may be sitting on a tiny circuit board in the Demarc room.
Now that’s really reaching… and too simple an argument. The facts simply do not support that line of reasoning.
I can see where you might also think that the problem with bandwidth in the corners of the world is self-created.
But here’s the “education” you need to get through all that cloud cover. Facts….not excuses and conspiracy theories.
DSL and cable are shared services. Bandwidth is shared in residential neighborhoods and often oversold. Therefore, many customers are paying for a limited resource and the result is a low retail price. Even the facilities at your residential location are shared… cable shares the TV connection and DSL travels on an analog voice grade line.
The other side of the coin is that T1 is a dedicated service (just like DS3 Bandwidth and Business Ethernet, for example). The circuit is designed as a digital circuit, special repeaters may be required if you are far from the central office and do not share your bandwidth with other subscribers.
If you want to talk about companies being forgotten, just talk to any independent bandwidth consultant who makes a living rescuing frustrated DSL and cable customers with T1 service (or any other dedicated bandwidth solution). . Certainly not all DSL and cable customers are disappointed, but there are enough to support a thriving industry.
You must understand that the cost of the physical plant is irrelevant. Only the price for you is relevant. And the price to you for T1 Internet almost always depends ONLY on the distance from your central office to an operator’s POP (Point of Presence)… and almost never depends on the distance from your location to the local central office.
DSL travels on an analog voice grade line. T1 is a dedicated service. The circuit is designed as a digital circuit, special repeaters may be required if you are located far from the head office. Regardless of SLAs and dedicated/oversold upstream bandwidth, cables for T1 and DSL are configured differently.
I can’t speak to ILECs’ costs when they sell a T1, but any CLEC will pay $X for an unconditioned copper pair for DSL and $Y for a conditioned loop (or loops, depending on how it’s delivered). ) for dedicated circuits.
On top of that, DSL is terminated in a DSLAM which is, compared to traditional “telco” TDM equipment, much, much cheaper. Old school telecom equipment for terminating T1, T3 and OC circuits is a whole other world with incredible prices and hopefully reliability. This stuff is designed to meet certain standards and it’s all for 5-9 reliability, which DSL equipment simply isn’t.
Then there’s installation and maintenance, which involves possibly installing repeaters, choosing the right technology (for example, traditional T1, DSL-based solutions – yes, many T1s use “DSL”, but not the cheap stuff), circuit planning, and possibly new construction, in some cases dropping a fiber Mux into the building.
Ongoing, you’re paying for the reliability of the line and a whole different level of people to service it.
This is just the circuit itself, I’m not even going to get into the transfer to ISP and any oversubscription issues. Even Frame/ATM services over T1 where you agree to use a “shared” medium are going to be more than cable or DSL because of the underlying T1 line that connects you to the provider.
But one thing that is a HUGE factor in the price is the fact that since it is a “commercial grade” line, the vendor’s SLAs require their technicians to respond to outages “within x hours” (usually 4 hours ). That is, if you have a business and your t1 goes off at 11pm, an ILEC technician will be on site (or in the cross-connect box) at 3am ILEC builds that cost into the monthly price…. while best effort/shared services (e.g. DSL, cable) say “within 24-48 hours” to fix (if you’re lucky), and you’re in the same send queue as the complaining kid on the street because your porn is downloading slowly.
Keep in mind that the cost of copper and the equipment to back up the digital circuit (dedicated bandwidth) is nothing compared to the cost of moving a truck after hours with a line technician to your location to fix the problem. And, if it’s a problem outside of your Demarc (which is often the case), you don’t pay for the fix. It’s an ILEC problem… which stands for “someone* paid that guy to go out, but not you.
The conclusion is the following.
If you’re serious about your business’ Internet needs and understand the importance of top-notch customer service, you should choose a provider with a reputation for excellent customer service. Dedicated bandwidth is a very cost-effective solution for any business that understands the difference between DSL and cable. Just keep in mind that the lowest price rarely means the best service or quality. Because in the world of internet connection, most of the time, you get what you pay for.