Wednesday, February 13, 2013

Leased Line Prices Lower, More Variety

Leased telecom lines have long been the standard of business connectivity from point to point or for dedicated Internet access. Let’s take a look at what leased line options are available and how prices have changed dramatically in the last few years.

Extend your network with leased lines for business...First of all, it might be useful to define what a leased line is and how it differs from other bandwidth options. Leased lines are pretty much what the name implies. You contract with a telecom service provider, a carrier, for a period of typically 1, 2 or 3 years in which you have exclusive use of a line service. There is no other traffic on your line. You can choose to load it up 24/7 or let it idle overnight. The cost is the same. Pricing is based on so many Mbps every month.

Note that this is Megabits per second and not total Megabits of traffic every month. The bandwidth sets the maximum speed of transmission and the maximum number of bits that can go over that line in a month. In practice, few dedicated lines are loaded to the maximum. Users deliberately leave some reserve or margin to handle peak vs average needs. In normal operation the lines are highly loaded at times and lightly loaded at other times.

Dedicated telecom lines are highly reliable and guaranteed to be available for a high percentage of time. You see this expressed as 99.9% or 99.99% uptime. The holy grail of availability is 99.999%, also called “5 nines”. When you order a leased line, it generally comes with a Service Level Agreement (SLA) that spells out the promised availability, mean time to repair if a line should fail, and what compensation you get if the provider isn’t able to meet the requirements of the SLA.

As you might suspect, leased lines are professional grade service used by businesses and organizations. They are not a consumer product. In fact, many carriers won’t even install a leased line to a residential address. That’s seldom a problem because there is an order of magnitude difference in price between leads lines and residential broadband.

Why are consumer line services, like cable and DSL, so much cheaper? For one thing, they are based on shared bandwidth. You and dozens or hundreds of your neighbors are actually sharing a leased line that the service provider has installed to their facility. If nobody is on that line but you at any given time, then you get all the bandwidth to yourself. Not the speed of the leased line, but some lower maximum rate depending on how much you pay each month. If many of your neighbors are streaming video, the line speed slows to a crawl for each of you. Most businesses can’t stand that unpredictability in performance. They need the solid bandwidth of leased lines.

Consumer line services don’t come with any sort of SLA. They are offered on a “best effort” basis. That means you get what you get and if something goes wrong it gets fixed when it gets fixed. This lack of commitment also helps to keep prices lower on residential bandwidth. Point to point connectivity for consumers? Forget it. All of these services access the Internet. If you want a secure point to point connection you need to set up a Virtual Private Network (VPN) for the locations you want to connect.

T1 lines have long been the staple of the leased line business. You can order a point to point T1 that connects two locations directly. You can order a dedicated Internet access T1 that connects you to the Internet. You can even order a T1 telephone trunk that give you up to 24 outside lines for your business phone system.

T1 prices have plunged from over a grand to under $300 a month in most locations. For that you get exclusive use of 1.5 Mbps for a long as your contract goes. If that isn’t enough bandwidth, you can bond multiple T1 lines together to get 3, 4.5, 6, 7.5, 9, 10.5 or 12 Mbps.

What competes with T1? It’s a newer service called Ethernet over Copper (EoC). This is a wireline service that offers high bandwidth and lower prices, but with some distance limitations. Entry level EoC service is generally 3 Mbps for the same price as a single 1.5 Mbps T1 line. Bandwidth can easily range up to 10 or 20 Mbps, with 45 Mbps and even 100 Mbps available in some locations. The more bandwidth you order, the lower the price per Mbps.

If you need more bandwidth than copper offers, you move up to fiber optic leased lines. DS3 at 45 Mbps is often carried by fiber optic line to your location and then by copper coaxial lines to your equipment. SONET is all fiber and starts at 155 Mbps. It goes up to 1 or 10 Gbps in most areas and 40 Gbps to 100 Gbps in some locations.

Ethernet over Fiber (EoF), like EoC, offers scalable bandwidths from 10 Mbps to 10 Gbps at a considerable discount over legacy SONET fiber services. Unlike copper Ethernet, there are no distance limitations for fiber optic Carrier Ethernet.

These are the major dedicated line services available for business. For international connections or linking multiple sites, Ethernet Line service over MPLS networks may be more cost effective. MPLS isn’t a dedicated line service, but virtual dedicated connections can be set up to guarantee performance over the MPLS network.

Does your business have a need to connect directly between two locations or to the Internet? There are likely multiple competing providers with both copper and fiber technologies available for your location. Check leased line prices and options to see what’s available right now.

Click to check pricing and features or get support from a Telarus product specialist.

Note: Photo of Ethernet cables courtesy of Wikimedia Commons.

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