Life in the Fast Lane | October 2001 Web Exclusive

Web Exclusive: Life in the Fast Lane

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An overview of the technology to get you on the Internet fast track.

By David Connell

Editor's Note: This is the web version, which has an expanded "satellite" section and summary

Let's face it, accessing the Internet via a dial-up modem is outdated. Not to mention that every time you or an employee dials up a Web connection to check email, it ties up a phone line. In today's world of video conferencing, streaming media and graphic rich websites, high-speed Internet access is the best way to take full advantage of the Web.

There are now a number of options small businesses can explore for a modern Net connection. Each technology has its own set of advantages and drawbacks. What you ultimately choose will depend on numerous factors including availability, price and the needs of your business. Here is an overview of some of these options, based on research conducted by Advisor Today staff.

Digital subscriber lines

Local telephone companies have been experimenting with Digital Subscriber Lines (DSL) for a number of years and finally seem to have services and price points that are competitive. Basically, DSL turns your current telephone line into an Internet connection that is always available and allows you to surf the Net and make a call at the same time.

The average entry price for DSL, which includes Internet access and usually several email accounts, is between $40 and $80 per month, depending on the provider. Many phone companies have made installing DSL simpler by allowing customers to easily hook up their system without a technician. This eliminates an installation fee. However, this will not be the case for more complicated installations, and some providers continue to charge an access fee.

In addition to faster download and upload speeds, most telephone companies offer scalable service, which allows you to pick a DSL package that fits your needs.

Unfortunately, DSL technology is available only in limited areas because, for various technical reasons, your office must be located relatively close to the company's communications plant to receive the service. Also, old wiring can hinder DSL technology by slowing down or losing the Internet connection.

Another potential disadvantage of DSL is customer service. Your DSL connection will only be as good as your current telephone service, which can be problematic for some. Other companies such as Covad and Rhythms compete with local telephone providers in the DSL market. However, their service is limited to
major metropolitan areas.

Cable

Cable modem service is another high-speed Internet solution that has enjoyed a lot of consumer success lately. This technology allows you to connect to the Internet using the same cable that you use to receive television programming. Cable modem service has many advantages including a low monthly fee, usually between $40 and $50, easy setup and fast speeds. There is no setup fee, but some customers can expect to pay up to $250 for equipment, or pay a monthly equipment rental fee of around $15.

Accessing the Internet over a high-speed cable connection will give you a robust connection that does not interfere with other communication devices. Additional advantages include the easy setup and relative low cost.

However, cable modem service is generally not as scalable as DSL service. Some companies may charge more for nonresidential service or prohibit businesses from using the service because a cable connection relies on a "shared pipe." This means that the more people using the system, the slower the speeds will be. As with DSL, cable modem service depends on the quality of your local cable company. Some companies may not offer it and others may not have adequate customer service.

Satellite broadband

Two companies, DirecWay and StarBand, have taken broadband access to the final frontier: space. They offer high-speed Internet access via satellite to every home and small business in the country that has an unimpeded view of the southern sky. While two-way satellite-based access to the Internet is fairly new, DirecWay (a subsidiary of Hughes Network Systems) has been using a satellite-based system--known as DirecPC--for several years, with a phone connection that sends data like email messages over the Internet.

Equipment for a StarBand system will cost $499.99 with a $199 installation charge, $44.99 in shipping and taxes and a $69.99 per month Internet access fee. Equipment for an entry level DirecWay system will cost $599 with a monthly service charge of $69.99.

Satellite systems offer download and upload speeds that are comparable to--and potentially faster than--those offered by cable and DSL services. However, because the signal must travel from a satellite in space, there can be a short, up to one second, delay in receiving and transmitting information from your
dish to a satellite. This delay is often referred to as "latency." Like cable modem service, satellite-delivered Internet access is a "shared-pipe" technology. This means that the speed of the service depends on how many customers are using the system.

This option may be the best choice for businesses located in rural areas that are not serviced by cable companies or lack DSL capabilities.

T1 Service

T1 service, which can best be described as "DSL on steroids," is the fastest, most scalable and most expensive option for connecting small businesses to the Internet. It is a digital circuit, consisting of two dedicated wires for sending and receiving data. The technology also employs "Time Division Multiplexing," which allows multiple signals to be sent over one line.

T1 lines have up to 24 channels, which can be split to carry voice and Internet traffic. Because many companies don't need this much power, most T1 companies will provide a "fractional" service that allows companies to use only a portion of these channels.

Prices for T1 service vary greatly because of its high scalability and the variety of companies providing the service. However, small businesses can expect to pay anywhere from $500 to $2,000 per month for T1 service, depending on how many employees are connected to the Internet. Installation of the service begins around $115, and equipment costs depend on the type of service and amount of connections provided.

Many companies, including CAIS Internet, Covad and other regional providers will include T1 lines with other services like Web hosting and e-commerce solutions. T1 technology is the most reliable service for high-speed Internet access, but installation and service charges can be expensive for small businesses. This technology is best for a business that employs more than 10 people and has significant Internet traffic.

Bottom line

There are several choices for small businesses that want to change lanes on the Internet and each option comes with its own set of advantages and disadvantages. For most services--DSL, cable and T1--the quality of your connection will rely most heavily on your local provider. Anyone buying these products
should shop around and compare prices and services. You might also consult other small businesses in your area to find out what they are using and who has provided them with good service. No matter what technology works for you, you'll find that every minute not waiting for an email to download or an Internet page to appear is a minute you can use to find clients and build your business.

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