Internet Wholesale Bandwidth Options

There are two types of organizations that buy Internet bandwidth. Most are end users. They want the access for their employees. The others are resellers. They take large Internet connections and divvy up the bandwidth to hundreds or thousands of individuals and businesses. These are Internet Service Providers (ISPs) looking to buy at wholesale and sell at retail.

The largest networks in the world, called Tier 1, don’t purchase Internet access. They are part of the core network itself. Those major world wide networks exchange traffic on basis of equals called peering. Each network gets as much traffic as it sends to the others, so all benefit and no money is exchanged.

Everyone else has to get to the Internet by accessing one of these Tier 1 networks. The next level down, the Tier 2 networks, are also very large Internet service providers. Since they don’t have the enormous global traffic to participate in peering, they purchase what is called IP Transit. This is Internet access sold on a per Megabit per second per month basis.

Smaller Tier 3 networks can purchase IP Transit from Tier 2 networks, if they are large enough to have an assigned AS or Autonomous System number (ASN) to identify them as part of the Internet. Large scale ISPs fall into this category as well as some large corporations and other organizations.

Local and regional Internet Service Providers, including WISPs (Wireless Internet Service Providers), buy DIA or Dedicated Internet Access. DIA connections are like point to point private lines, except that one end connects to the Internet. Other private line characteristics still apply. The bandwidth provided is completely dedicated to the ISP and not shared with anyone else. There are generally SLAs or Service Level Agreements that spell out characteristics such as maximum latency, jitter and packet loss as well as time to respond to outages and time to make repairs.

Dedicated also means that there are no extra charges for heavily loading the line. You can use the entire capacity of the circuit in both directions or only some of it. The price is the same.

The smallest DIA service is usually a T1 line running at 1.5 Mbps. This is a symmetrical service, meaning 1.5 Mbps upload and 1.5 Mbps download. Usually the download path is much heavier loaded than the upload path for typical Internet access. If fact most consumer Internet access is sold with 5x to 10x higher speeds on download than upload. For business users, upload speeds can be important when transferring large files to remote backup sites and servers within colocation centers.

Obviously, T1 lines can’t serve a large user base but they work great for WiFi hotspots and rural or subdivision WISP service where signed-up customers number in the dozens, not hundreds. A nice feature of T1 lines is that they can be bonded by adding more lines to double, triple and quadruple bandwidth up to about 10 or 12 Mbps. The other nice feature of T1 lines is that they are available where other line services don’t reach. If you can get business telephone system into a facility, you can probably get T1 DIA service.

The next increment in traditional telecom bandwidth is DS3, also called T3 lines. This service runs at 45 Mbps which is large enough for a good size service provider to offer competitive bandwidth. Beyond that, SONET fiber optic services include OC3 at 155 Mbps, OC12 at 622 Mbps and OC48 at 2.5 Gbps are very popular.

A strong competitor to T-Carrier and SONET bandwidth is Carrier Ethernet. It comes in two flavors, Ethernet over Copper (EoC) typically from 1 to 50 Mbps and Ethernet over Fiber (EoF) from 10 Mbps to 10 Gbps. In a some metropolitan areas, you can also get EoFW or Ethernet over Fixed Wireless at DS3 and Fast Ethernet speeds. Where available, Carrier Ethernet tends to have considerably better pricing than other services.

Do you resell Internet access to other ISPs or end users? If so, see if you can get better wholesale pricing on Dedicated Internet Access and IP Transit services.

Dedicated Bandwidth vs Cable

There are a couple of good but quite different approaches to business Internet connectivity. One is dedicated bandwidth, as exemplified by T1 lines and Ethernet over Copper. The other is Cable broadband. Let’s take a look at what each has to offer and how you would pick the right service for your business.

Small and medium size businesses that pick dedicated bandwidth services do so either because there is no shared bandwidth service readily available or because they value the consistency and service level agreements provided by the dedicated telecom providers. Companies that choose Cable broadband do so because they get a lot of bandwidth for a relatively small price. Cable BB is an established service that has been proven in years of service to residential and business users. The service availability is generally quite good, especially during business hours, and the low prices may be more important than service guarantees.

It’s important to note the definition of the term “dedicated” in this context. It doesn’t mean working extra hard like, say, a dedicated employee. What dedicated means is that a certain amount of bandwidth is reserved or dedicated to your exclusive use. If you order a T1 line, you can count on having 1.5 Mbps upload and 1.5 Mbps download capability available at all times. There is no such thing as overage charges or fair use policies. You can load that T1 line up to the limit and run it that way all month. You’ll be charged the same as if you lightly used the service during business hours and let it idle overnight.

Cable broadband is sold on a different basis. First of all, the bandwidth is shared not dedicated. You’ll notice that Cable bandwidth is specified as “up to” 10 Mbps, 100 Mbps and so on. At any given moment you may experience the full bandwidth or a small fraction of it. Why? It’s the sharing involved. What Cable companies do is lease large dedicated bandwidth circuits and then divvy that bandwidth up among their subscribers. The chunk allocated to your area may be shared by dozens or hundreds of other users. Whether or not that makes a difference depends on what you are doing on the Internet and what others on the same service are doing.

Cable broadband is designed to match the expected activities of the typical Internet user. You know that when you are looking something up online, you first query a search engine. Then you read through the first page or two of listings deciding on what site to visit. Finally, you select a site and it downloads in your browser. You may quickly go to visit another page on that site or you may spend a minute or two reading what’s on the screen.

Notice that what you were doing was sending out commands from your keyboard, waiting for a page download and then not accessing the Internet at all while you perused the material. That’s why shared bandwidth works. Not everyone is going to be typing on their keyboard or in the midst of a file download simultaneously. While you are reading, someone else can be downloading and vice versa.

This is also the reason why asymmetrical bandwidth works so well for Internet access. Asymmetrical means that upload and download speeds are vastly different. You may order 30 Mbps download with 3 Mbps or 6 Mbps upload and be perfectly satisfied. It only takes a small amount of data from the keyboard to trigger much larger data packages in the form of websites or videos to download.

Dedicated bandwidth services like T1, DS3, EoC, EoF and SONET fiber optic tend to be symmetrical. The upload and download speeds are the same. This is particularly valuable if you are communicating between organizations, sending files back and forth, uploading to a remote server or backing up files. In these cases, upload capacity counts.

The other service that works much better over dedicated rather than shared bandwidth is VoIP telephony. In fact, you are much better off connecting directly to your VoIP service provider with a dedicated T1 line or SIP trunk than using the Internet at all. The Internet offers no class of service controls so your sensitive voice packets can easily get pushed around by someone else’s data packets. That situation is even worse on shared bandwidth access services where your bandwidth varies all over the place.

Is your business in need of Internet access, point to point connections or multi-location connectivity? Check prices on dedicated and shared bandwidth options and get complementary expert advice on what services make the most sense for your business requirements.

Dedicated vs Shared Internet Access

There are fundamentally two types of broadband Internet access. They are shared and dedicated.

You may have been thinking wireless, landline, satellite or fiber optic. Those are delivery technologies that can determine price and availability. But your fundamental decision is whether to go with shared or dedicated Internet access.



What’s the difference? The name pretty much describes the nature of your service. Shared Internet access is something like a buffet. You see that big roast and think that you can fill your plate with meat. But by the time you get to the head of the line, you only get a sliver of beef. “Sorry,” says the chef. “We have to limit portions of this entree because there is so much demand.”

That’s how shared Internet service works. You sign up for what you think is 10 Mbps download and 2 Mbps upload. But if you look carefully at the supplier's disclosure, they say that you get “up to 10 Mbps download and 2 Mbps upload.” Up to means a maximum, not a minimum or even an average value. In other words, 10 Mbps is the fastest line speed you can ever expect to see and don’t count on seeing it at any particular time.

Why is this the case? It’s the way that the shared Internet connection is organized. The service provider figures that not everyone who signs up for their broadband service will be online simultaneously. Even those who are at their computers aren’t likely to be all downloading huge files at the same time. So they sell that 10 Mbps service to 10, 25 or even 100 different users. If most people are composing email or reading web pages, you’ll have the lion’s share of the bandwidth to yourself. But as soon as one or more users start downloading, that 10 Mbps is divvied up to support as many users who want to use bandwidth at that time.

As you can imagine, the amount of shared bandwidth you have available can vary greatly and will change from minute to minute. If you have an important document to upload or download, you initiate the transfer and take your chances. There’s no guarantee of how long that transfer will take. It might go quickly. It might drag on seemingly forever.

Who puts up with this type of service? Consumers, that’s who. The reason is cost. The provider pays for the 10 Mbps backbone service and divides the cost among the number of users sharing that bandwidth. The price of shared broadband Internet is reasonable for residential users, who rarely are doing anything critical. The worst they experience is streaming audio or video that breaks up, or long delays in accessing their favorite Web sites.

Contrast this situation with dedicated Internet access. Dedicated means just that. The bandwidth you order is dedicated for your use only. You may still experience congestion on the Internet itself, but that 10 Mbps connection to your provider will always run at 10 Mbps.

Most dedicated connections are also symmetrical. That means they run at the same speed in both the upload and download directions. Your 10 Mbps service may be described as 10 x 10 Mbps bandwidth. You get 10 Mbps download and 10 Mbps upload. That can be very important if you transfer files in both directions. You won’t be slowed down by a lower upload bandwidth.

The other difference between shared and dedicated bandwidth is that dedicated bandwidth is sold as a professional business service. It most often comes with an SLA or Service Level Agreement that describes what service you are ordering and how reliable it is expected to be. If the line goes down for any reason, it gets high priority and should be available again within a certain number of hours.

Shared bandwidth is sold on a “best effort” basis. That means that the carrier will try to keep things running properly, but there are no guarantees as to availability or how long repairs will take. If someone down the street is having service problems, the repair effort might disrupt your service too. That’s just the nature of sharing facilities to save money.

Now you know why home broadband services seem so much cheaper than business grade dedicated Internet access. It comes down to performance and availability. If the Internet is important to your business activities, then you’ll want to check the prices and availability of dedicated Internet access for your location. You may find that prices have come down so much in the last few years that dedicated access is now well within your reach.