Why Do Internet Services Like DSL, T1, and Metro Ethernet Have Big Cost Differences?

It’s not uncommon for a potential client to contact us and ask for a price on Internet access service… after all, we are an ISP and commercial Internet access is our most popular service! Our sales reps will usually inquire with the prospective client as to what their current Internet service is, their budget, and what’s wrong with their current service. This is to ensure we provide the best solution to solve their current problems, be it a DSL connection, a T1 line, or Ethernet services (either fiber based Metro Ethernet, or copper based Ethernet over Copper).

When we let clients know what services are available to their location, and which would be the best fit based on their answers to the above questions, the first thing we normally get asked is why there are such big cost differences between the services we offer. Budget is always a key decision factor when it comes to new services, but we also want to make sure that the client’s needs are being met by the service that would be the best overall fit for them.

To help businesses better understand the differences in costs on some commercial Internet options, we wanted to put together a brief description of each service, and what’s entailed with the pricing they come with.

DSL – DSL service is the least expensive of the commercial Internet access options we offer, with pricing ranging from $29 monthly through almost $150 monthly, based on the speed chosen and whether or not the company requires a block of static IP addresses. DSL is offered over a standard phone line, which can either be one currently used by the company for phone service, or Meganet can install one dedicated just to the Internet connection (also known as a standalone or naked DSL). Monthly costs are lower than other services for a number of reasons; first, the copper phone line used to deliver the Internet is the least expensive physical connection used in commercial Internet access options. Secondly, the service is distance specific – the further a business is away from the local phone switch, the less speeds their location will qualify for. Third, DSL does not have guaranteed speed or uptime, which might impact some types of businesses if the connection is not consistent. For these reasons, DSL is the lowest priced Internet solution for companies.

T1 – T1 lines have drastically dropped in pricing over the last 10-12 years, with an average monthly starting cost around $299-$399 depending on location and required bandwidth. T1 is delivered over digitally conditioned copper, so uptime and throughput are guaranteed, unlike DSL service. T1 can also be delivered to any business, regardless of location. While T1’s bandwidth is capped out at 1.5M (although it can be load balanced or bonded for higher throughput), it’s extremely low latency in comparison with DSL service and it’s reliability still makes it a very viable Internet solution for businesses that need to have guaranteed uptime. The higher quality physical loop, along with those uptimes (guaranteed by FCC tariff) help contribute to T1 monthly pricing.

Ethernet over Copper – EoC uses Ethernet technology to deliver higher bandwidth at a lower cost to businesses that qualify for it. To do so, a business must be close to the phone switch that serves their area, and the copper quality must be very high. As a result, Ethernet over Copper has a much smaller availability area than DSL. When it’s available, it makes a great option for businesses that need higher bandwidth with a good level of reliability (usually in the 99.99% range). However, it’s smaller footprint doesn’t make it an option for businesses that are just outside of major metro areas.

Metro Ethernet – Over the past few years, Metro Ethernet has quickly taken over with businesses who relied on fiber-based T3 connections to deliver high quality bandwidth, and at a much lower price point. T3 connections top out at 45M, while Metro Ethernet tops out at nearly 10GB in some areas. Since the service is offered over fiber, reliability and uptime are at a high 99.999%; however that level of high bandwidth and reliability does come at a higher cost, as Metro Ethernet usually starts around $900/month and goes up from there. For businesses with heavy Internet traffic that helps generate their revenue, Metro Ethernet is by far and away their best Internet access option.

Businesses rely on the Internet now more than ever. While costs are a big factor in choosing a new service, it’s important to consider the bandwidth and traffic needs of the company to make sure that their new connection will meet those needs both now as well as down the road as they continue to grow.

Metro Ethernet eBook - Scalable, Reliable, Affordable Fiber Bandwidth Solutions!


For more information about Ethernet services for bandwidth use, download our free eBook “Metro Ethernet: Scalable, Reliable, Affordable Fiber Solutions” to learn more about how Metro Ethernet Internet access can help your business. Reliable Internet access is critical when considering any business plan, and our case studies in the book will help show you how we can help in almost any situation. Download the free eBook from MegaNet today!

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