Dedicated Internet Access Buyer’s Guide

Compare DSL, Leased Line and Ethernet -

Dedicated Internet Access Buyer’s Guide

Copyright © 2009 OneStopClick Ltd. All Rights Reserved

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 Dedicated Internet Access Buyer’s Guide

Contents
Contents ............................................................................................................................... 2

Executive Summary........................................................................................................ 3

Dedicated Internet Access Services Overview .................................................. 4

Key Features and Analysis of Dedicated Access Technologies ................. 6

Leased Line......................................................................................................................... 6

Bonded DSL ........................................................................................................................ 7

Ethernet Circuit ................................................................................................................ 8

Market Overview ............................................................................................................. 9

Cost of Dedicated Internet Access Services ..................................................... 10

Checklist: What to Ask Before You Decide ....................................................... 12

Conclusion ....................................................................................................................... 14

About OneStopClick..................................................................................................... 14

Sources .............................................................................................................................. 15

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 Dedicated Internet Access Buyer’s Guide

Executive Summary

When deciding on a business connectivity solution, there are many different options
available. Choosing which type of dedicated internet access service is the best fit for
your organisation depends upon your budget, your organisation’s connectivity and
bandwidth needs, the type of network applications which are most typically used
and the future plans of your organisation. Traditional leased lines remain the top
choice amongst larger corporations, but their market share continues to erode
thanks to the availability of inexpensive alternative solutions such as bonded DSL
and Ethernet circuits. These options offer similar performance at a greatly reduced
cost and with a simplified infrastructure installation.

This white paper explores the benefits and drawbacks of each of these three
dedicated internet access solutions, along with providing an overview of their costs
and installation requirements. The goal of this document is to provide a baseline
upon which to further explore the specific dedicated solution that is the most
beneficial to your organisation.

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 Dedicated Internet Access Buyer’s Guide

Dedicated Internet Access Services Overview

Businesses are fortunate to have a fairly wide range of options when it comes to
As in many other areas of
the information choosing a dedicated internet access solution. Of course, each potential service
technology sector, poses its own particular set of technological challenges, key features and costs. As in
traditional higher-priced many other areas of the information technology sector, traditional higher-priced
dedicated internet access
services have recently dedicated internet access services have recently been challenged by lower cost,
been challenged by lower technologically innovative alternatives which are gaining serious ground in the UK
cost, technologically market.
innovative alternatives
which are gaining serious
The gold standard of business connectivity has for many years been the dedicated
ground in the UK market.
leased line1. A leased line (also known as an E1, E3, Frame Relay or OC line), is a
permanent connection established between two distinct geographical points, such
as two offices of the same company, or a bank and a remote financial institution.
This connection is not shared with any other users on the telecommunications
company’s network, and as such it guarantees stable bandwidth and excellent data
security. It is an ‘always on’ proposition and is one of the most reliable ways for a
business to either transfer data or access the internet. Leased lines can be
configured to handle a variety of different transfer speeds, and usually feature
excellent support and Service Level Agreements (SLA) from the provider. A leased
line can also be part of a Wide Area Network access solution, which allows a Local
Area Network (LAN) to connect to other LAN’s and the internet at large.

Unfortunately, the costs associated with leased lines are some of the most expensive
Unfortunately, the costs
in the industry. The installation lead-in times, cost of installation and the
associated with leased
lines are some of the maintenance and access fees imposed upon the line subscriber can be daunting for
most expensive in the many small businesses. The distance between the business, the provider, and the
industry. The installation sites that are to be linked together also play a significant role in increasing the price
lead-in times, cost of
installation and the of a leased line. These factors, combined with recent innovations in connectivity
maintenance and access technology, have allowed for several viable leased line alternatives to make their
fees imposed upon the way to the fore.
line subscriber can be
daunting for many small
Digital Subscriber Lines (also known as DSL, ADSL, SDSL, and ADSL Max) have long
businesses.
been avoided by companies seeking quick and reliable internet access and data
transfer. Originally positioned as a consumer technology, DSL is based on a
. switching data connection technology that shares its bandwidth with a host of other
customers accessing the provider’s network. However, Bonded ADSL uses multiple
DSL circuits working together as one in order to get around many of the traffic
congestion issues typically associated with this type of connection. Bonded ADSL is

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 Dedicated Internet Access Buyer’s Guide

now offered with the robust SLA that businesses require, as well as excellent
transfer speeds. Installation is also quicker and more flexible than that of a leased
line. In addition, costs are significantly lower when compared to standard leased
Ethernet circuits are lines. The recent infrastructure upgrades made as a result of Local Loop Unbundling
another less expensive (LLU) and the emergence of next generation ADSL services such as Annex M DSL
option for those who seek
a high bandwidth means that bonded DSL will continue to improve in terms of bandwidth and
corporate connectivity availability.
solution.
Ethernet circuits are another less expensive option for those who seek a high
bandwidth corporate connectivity solution. These Virtual Private Networks (VPNs)
are built over Ethernet links forged from point-to-point on either a city, regional or
national scale. The primary advantage of a VPN is that it enables a company to offer
the same level of broadband connectivity to as many offices and remote workers as
necessary, as well as provide access to geographically-specific resources from
anywhere within the network – including internet access. Bandwidth over this type
of connection can be scaled up to a very high level, and it mimics a LAN in terms of
functionality. The single connection point design also decreases connection and
installation costs.

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Their design enables
providers to offer SLA’s of
up to 99.999% or in some
cases even 100%, which
can be a key deciding
factor for many
operations who cannot
afford to have their data
link interrupted for any
reason
Leased lines are also
ideally suited for
businesses which require
the lowest possible
latency times when
transmitting data.
Latency refers to the time
delay between initiating
communication and that
communication reaching
its intended recipient
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Dedicated Internet Access Buyer’s Guide
Key Features and Analysis of Dedicated Access
Technologies
Leased Line
The appeal of a leased line access solution is easy to understand. The bandwidth
that has been allocated to the company leasing the line is used exclusively by that
company, which means not only excellent throughput but also an added layer of
security. There is no switching involved – the direct connection facilitates the
maintenance of a constant line of communication between the two points. Their
design enables providers to offer SLA’s of up to 99.999% or in some cases even
100%, which can be a key deciding factor for many operations who cannot afford to
have their data link interrupted for any reason. Most leased lines feature automatic
switchover to backup connections which can step in should any problems arise.
With recent price drops, these resilient backup connections are increasingly found in
the form of dual leased lines, with each connected to a geographically separate
Point of Presence (POP) through a different provider. However, they are more often
implemented as an inexpensive bonded DSL solution.
Leased lines are also ideally suited for businesses which require the lowest possible
latency times when transmitting data. Latency refers to the time delay between
initiating communication and that communication reaching its intended recipient.
Those who benefit the most from low latency times include companies which deal
extensively in online video, teleconferencing or live data processing such as financial
transactions. Online reporting regarding the status of the connection, along with full
provider management and replacement of all associated hardware are also
hallmarks of leased line use.
In the UK, the speed of a leased line typically ranges from 2 Mbps up to 10 Gbs. Line
speed generally increases in specific bandwidth increments or ‘channels’. Leased
lines can also be configured as ‘burstable’, which means that they can exceed their
allocated bandwidth up to a certain limit if needed. This enables a business to pay
for a low rate of transfer speed on a monthly basis and occasionally absorb the cost
of their extra bandwidth needs.
Leased lines are fast, stable, and come with a very high level of service and uptime
guaranteed by their associated service provider. However, there is a steep price to
pay for these benefits. To begin with, scheduling an installation for a leased line can
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 Dedicated Internet Access Buyer’s Guide

take up to 90 days, depending upon the schedule of your telecom provider. Longer
lines, or lines that are located far from the provider’s POP are also more costly. The
built-in usage costs associated with leased lines are also amongst the highest in the
business. Finally, when considering the needs of larger or growing operations,
leased lines do not scale well, as a leased line essentially connects two points and
cannot serve as a hub for multiple remote users in other offices or in the field. It is
also costly to move should operations change locations.

Bonded DSL
The explosion of high The explosion of high broadband internet speeds available to consumers in recent
broadband internet years has been harnessed for business use in the form of bonded DSL. ‘Bonded’
speeds available to
consumers in recent refers to the practice of combining several standard DSL lines into one connection.
years has been For example, an 8 Mbps bonded DSL line could be formed out of two 4 Mbps DSL
harnessed for business lines, or even four 2 Mbps DSL lines. Bonded lines effectively increase the
use in the form of bonded
bandwidth of a particular access solution exponentially, and remove many of the
DSL.
latency issues and traffic jams that occur on standard DSL lines. They also help to
improve redundancy when routing traffic – if one line is disabled, then the other
bonded DSL lines can instantly take over.

In addition to offering In addition to offering excellent data transfer speeds and good reliability – some
excellent data transfer SLA’s are in the 99.99% range – bonded DSL is also inexpensive. Costs for the service
speeds and good
reliability – some SLA’s are far lower than even the least expensive leased line, both in terms of use and
are in the 99.99% range – installation. Bonded DSL also has the advantage of rapid implementation times,
bonded DSL is also which makes it a more flexible solution for businesses. Hardware costs associated
inexpensive
with implementing this form of dedicated access are extremely reasonable.

Businesses can opt for a managed bonded DSL solution wherein their service
provider handles all configuration and support issues stemming from the
combination of different DSL lines, or they can choose to self-manage and lower
their costs even further. In the latter case, service providers will usually charge the
The downsides to bonded
DSL include a lower level business only the cost associated with each of the individual lines being used in the
of data security, lower bonded connectivity solution. Self-managed solutions are also typically remotely
overall maximum accessible by system administrators.
connection speeds, and
greater risk of congestion
The downsides to bonded DSL include a lower level of data security, lower overall
when compared to a
dedicated leased line. maximum connection speeds, and greater risk of congestion when compared to a
dedicated leased line. Some providers will not offer an SLA attached to their bonded
DSL service, although these organisations are in the minority.

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One of the key
differences between
Ethernet circuits and
other access solutions is
that not only can they
serve as a point-to-point
data link like a leased
line, but they also
possess the ability to link
multiple sites together
over the same connection,
functioning as sort of
central hub.
Individual Ethernet
circuits must be
constructed within a 25
kilometre radius of the
POP (Extended Ethernet
within 35 kilometres),
which means larger
networks are built by
linking multiple Ethernet
circuits together over a
broader geographical
area
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Dedicated Internet Access Buyer’s Guide
Ethernet Circuit
Ethernet circuits, or extensions can enable a company to build a robust VPN
featuring maximum speeds similar to that of a leased line. One of the key
differences between Ethernet circuits and other access solutions is that not only can
they serve as a point-to-point data link like a leased line, but they also possess the
ability to link multiple sites together over the same connection, functioning as sort
of central hub. This helps to make them an excellent option for companies with
multiple field offices or remote workers who regularly access the company’s
network from home. By the same token, it is easy to scale up access should
operations require increased bandwidth.
It helps to think of an Ethernet circuit as the extension of a company’s LAN. It can
offer LAN functionality over an area the size of the UK, or be scaled down to work
within the city limits of where a company is located. This means data can be
transferred from Ethernet port to Ethernet port by users in an intuitive manner2.
Configuration and installation is simple and inexpensive, as are usage fees.
Individual Ethernet circuits must be constructed within a 25 kilometre radius of the
POP (Extended Ethernet within 35 kilometres), which means larger networks are
built by linking multiple Ethernet circuits together over a broader geographical area.
As with all VPN’s, Ethernet circuits pose security issues as a result of the gateways
into a company’s LAN which much exist in order for the circuit to function. Since an
Ethernet circuit shares the same switched network access as DSL, there is also the
potential for slowdowns due to increased network traffic. Unlike a leased line, the
technology does not allow for bursts of extra bandwidth during peak hours or
extreme usage scenarios, and depending upon local providers, Ethernet circuits can
sometimes take up to 65 days to install3. This makes them less flexible than bonded
DSL from an infrastructure perspective.
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There are several reasons
as to why bonded DSL,
Ethernet circuits and
other connectivity
solutions have eroded the
market share of leased
lines in Europe, and of
these, cost is the single
largest factor
Leased lines do remain
popular amongst large
corporations who
appreciate their ability to
handle voice, video and
data connections between
their sizable centrally-
located offices and data
centres
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Dedicated Internet Access Buyer’s Guide
Market Overview
It is no surprise that the advent of inexpensive alternatives to digital leased lines has
contributed to the decline in use of this once stalwart technology. Leased lines still
hold onto a substantial section of the market, with their estimated UK retail sales
nudging the £1bn per year mark1. This does not even include the healthy wholesale
market for leased lines, and taken all together leased lines account for the majority
of business connectivity in the UK4. However, Western Europe has seen a
pronounced reduction in new leased line installations, a situation which is expected
to not only continue, but also to accelerate as time goes on5. In fact, between 2005
and 2010 market analysts predict that the market for leased lines will see a
compound annual growth rate of -8%5. Total market value is forecast to drop by
50% within the same period of time5.
There are several reasons as to why bonded DSL, Ethernet circuits and other
connectivity solutions have eroded the market share of leased lines in Europe, and
of these, cost is the single largest factor. The far lower usage and installation costs
of these technologies has enabled a larger number of small and medium-sized
businesses to employ efficient networks and challenge their competitors to reduce
their own IT and connectivity-related expenses. This has lead to a snowball effect
wherein companies that previously employed pricy leased lines are abandoning
them in favour of the increased savings found in bonded DSL and Ethernet5.
Small businesses also prefer to take advantage of the flexibility offered by these
technologies5. With more and more jobs being outsourced and with a larger
percentage of employees electing to work from home, the need for a network
solution which can accommodate a number of geographically diverse users is
greater than ever. Smaller companies also tend to plan for the shorter term and
respond more quickly to changes in the market than larger ones, which means that
the reduced installation lead times and easy expansion capabilities of these
alternative access solutions become far more attractive.
Leased lines do remain popular amongst large corporations who appreciate their
ability to handle voice, video and data connections between their sizable centrally-
located offices and data centres5. However, greater numbers are defecting to
alternatives despite pricing incentives designed to keep current users of this type of
digital connection from switching to a different type of service4. The costs of leased
lines are almost 1/3 of what they were at the beginning of the 1990’s, but the
differential has not been enough to stave off the drain of business customers4.
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The top tier leased lines –
those which can handle 1
Gbs to 10 Gbs of data –
have costs which can
vary greatly depending
upon whether the
installation is being
performed in a major city
or across a more rural
area
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Dedicated Internet Access Buyer’s Guide
Cost of Dedicated Internet Access Services
So far, this document has made several references to the high cost of leased lines.
How expensive is this type of dedicated network access? Even at lower data speeds,
the figures can be formidable. In 2008, the least expensive 2 Mbps leased line in the
UK cost on average £1,800 to install and between £300 and £900 per month in terms
of monthly fees4. Moving up the scale, a 10 Mbps typically cost between £4,000 and
£7,500 to put in, depending upon the provider, and up to £2,600 per month to use4.
The top tier leased lines – those which can handle 1 Gbs to 10 Gbs of data – have
costs which can vary greatly depending upon whether the installation is being
performed in a major city or across a more rural area. In London, the cost to install a
1 Gbs line across town would run £13,000, while the same line connecting an office
in one city to that in another averages £25,000 to install4. Monthly costs range
between £2,000 per month for a metropolitan connection and £7,000 per month
between cities4. A 10 Gbs line cost £10,000 more to install and £1,000 more per
month in usage fees4. UK pricing for leased line installation and rental is significantly
less expensive in London versus purchasing the same services outside of the city’s
boundaries.
It is important to keep in mind that amortisation of installation costs over a multi-
year contract with a service provider, along with the monthly discounts associated
with longer term contracts can reduce or otherwise alter leased line costs. These
multi-year contracts are popular amongst corporate clients looking to lock-in
favourable pricing and maintain a stable internet provider. 2009 has also seen
substantial discounts for leased line installation (averaging a 30% decrease versus
2008) and rental (ranging between 10% and 20% decrease per month versus 2008)
as providers scramble to remain competitive6.
Ethernet circuits represent the next tier down when it comes to installation fees and
service charges. A basic 10 Mbps Ethernet circuit incurs an installation charge in the
neighbourhood of £1,200, with monthly fees of £1757. Interestingly, while the cost
for installing a 100 Mbps circuit is more than double that of a 10 Mbps (£2,750),
monthly rental is only £2307, an almost negligible difference. The highest bandwidth
Ethernet circuits, those capable of handling 10 Gbs, cost £14,000 to install and
approximately £1090 per month for access fees – a mere fraction of the costs of a
leased line7.
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In comparison to Ethernet and leased lines, the pricing for bonded DSL is
dramatically lower. An unmanaged solution can start at £50 per month for a 40
Mbps up / 6.4 Mbps down connection, all the way up to £300 per month for a steady
managed 16 Mbps up / down connection8. These options are free of traffic shaping
or throttling. Installation fees can even be as low as £3359.

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Checklist: What to Ask Before You Decide

Deciding on which dedicated network or internet access solution is the best match
for your company is entirely dependent upon not only the present needs of your
company and your budget, but also what you foresee being required in the next 3 to
5 years. It is important to plan for growth and change when choosing to adopt a
new technology. In order to do so, it is necessary to ask the right questions about
your organisation’s operations and the technological needs that will help you to
reach your future goals.

The questions below are designed to help guide you towards choosing a dedicated
internet access solution that is the best possible fit for your needs and planned IT
spending. They can also help you to select between the different connectivity plans
that you will encounter from the service providers who tender offers to you.

• Are low monthly bandwidth costs a priority?

• Is data security more important than any other concern?

• Does my company need the highest tier of bandwidth available?

• Does my company need a low latency connection?

• Does my company need an SLA that approaches 100%?

• Are the data needs of my company static, or is there a projected call for
expansion in the future?

• Will my company’s needs be met with steady bandwidth or does it require

the ability to access extra bandwidth during peak hours?

• Is my company’s IT staff capable of managing a network solution or is

external management required?

• Does my company require a network solution immediately, or can the

implementation date be as long as 3 months away from the decision date?

• Will my company be in the same location in 3 years? In 5 years? Will the

site we are connecting to also remain in the same location for the same
period of time?

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• Can my company afford to amortise installation costs over a multi-year

period?

• Can my company afford to absorb installation costs should a move be

required?

• Does my company require multiple external connections to field offices or

home workers?

• Does my company require a VPN?

• Will my company need constant monitoring and reporting on connection

status?

• Do the service provider representatives I have talked to understand my

business needs as I have communicated them?

• Do the service providers I have been in contact with have a good reputation
in my area?

• Have I short-listed potential service providers that meet our requirements?

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..however, it is clear that
on the whole, not only are
small and medium-sized
businesses moving away
from the type of
centralised work
locations that favour
leased line installations,
but so are large
corporations
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Dedicated Internet Access Buyer’s Guide
Conclusion
IT planning decisions are never easy, particularly given the uncertainty surrounding
issues such as business expansion and the changing labour market. However, it is
clear that on the whole, not only are small and medium-sized businesses moving
away from the type of centralised work locations that favour leased line
installations, but so are large corporations. The projected decline of leased line
installations is not necessarily a judgement on their utility, but rather a reflection of
the changing state of the business world and the renewed focus on flexible and cost-
effective solutions.
Bonded DSL and Ethernet circuits offer almost identical levels of bandwidth when
compared to traditional leased lines, and they do so at a greatly reduced cost and a
reduced installation lead time. While the details of the technologies might not
match up point for point – particularly with regards to security or latency – the
flexibility and expandability of these two dedicated internet access solutions make
them a better match for today’s business climate. Bonded DSL and Ethernet circuits
provide the features, bandwidth, adaptability and cost savings that can give your
company an edge in a very competitive market.
About OneStopClick
OneStopClick delivers white papers and technology-related research helping IT
professionals and business executives achieve better business outcomes. Since 2003,
our content and Solution Advisers have helped thousands of professionals educate
themselves on technology related solutions as well as evaluate and qualify suitable
providers.
For advice, quotes and vendor comparisons on DSL, Leased lines or Ethernet services
contact us on 0844 243 5669 (local call rate) and ask to speak with a Solutions
Adviser or visit www.onestopclick.com
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 Dedicated Internet Access Buyer’s Guide

Sources
1 Ofcom 2008. Leased Lines Charge Control. Retrieved June 15, 2009 from
http://www.ofcom.org.uk/consult/condocs/llcc/leasedlines.pdf.

2 British Telecommunications plc 2005. MegaStream Ethernet and BT Enterprise Ethernet. Retrieved June
16, 2009 from
http://www.productsandservices.bt.com/btbusiness/btbusinessProducts/pdfs/PRD200484_fact.pdf.

3 Netservices n.d. Ethernet Technical Data Sheet. Retrieved June 17, 2009 from
http://www.netservicesplc.com/pdf_files/datasheets/Ethernet%20Tech%20Sheet.pdf.

4 OneStopClick 2008. The Falling Costs of Wide Area Networks. Retrieved June 15, 2009 from
http://networking.onestopclick.com/white-papers/28/the-falling-costs-of-wide-area-networks.html

5 TF Market Research 2008. Western Europe Retail Digital Leased-Line Forecast and Analysis, 2005-2010.
Retrieved June 15, 2009 from
http://www.marketresearch.com/product/display.asp?productid=1867357&SID=89705875-443394317-
523592862&kw=leased%09line.

6 Empirical evidence from data collected by OneStopClick from ISPs between January to June 2009.

7 British Telecommunications plc Openreach Price List.

http://www.openreach.co.uk/orpg/pricing/wes/downloads/ORPL_WBB_WES.htm. [accessed June 17, 2009].

8 CCS Leeds UK Leased Lines. http://www.ccsleeds.co.uk/uk-leased-lines.html. [accessed June 16, 2009].

9 Charges Schedule for BT Bonded ADSL Service. http://business.bt.com/bondedadsl/pricing. [accessed

June 16, 2009].

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