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Pick Your Poison: Choosing a Broadband Technology

We will help you make sense of your broadband options and which technology will be a good fit for your business.

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Deciding whether to fire an unproductive employee? That’s a tough one. Re-locating your business to an area that has better tax incentives? Not for the faint of heart. Yet, there is one decision that also keeps entrepreneurs up at night, tossing and turning: which broadband technology do you use?

In all seriousness – there are almost too many options. You can connect up with a local DSL provider for a low cost – and perhaps low bandwidth. Wireless options like LTE and W-Max are now widely available in major cities. Some small businesses choose the more expensive route and get a T1. Others are in a rural area and only a 4G wireless feed or a fixed-wireless connection will suffice.

Part of the answer has to do with trend-spotting. Business analyst Roger Kay with Endpoint Technologies says some wireless technologies, like LTE, are becoming more prevalent in some major cities like New York and Minneapolis, while Wi-Max has lost some momentum.

Meanwhile, Kneko Burney, the founder and chief strategist at Compass Intelligence, says companies like Time Warner and Cox offer the best value for traditional cable, and that Sprint (Wi-Max) is a good fit for businesses on the move.

For each broadband option, we’ve explained the speeds you can expect, provided a quick explanation of how the technology works, and given some examples where it might fit the best.

1. DSL
DSL, or Digital Subscriber Line, remains one of the most common ways for a small business to connect to the Internet, primarily because the service is often bundled with a phone line. Speeds run up to only about 6-7Mbps. DSL uses the traditional copper wiring used by telephone systems, and DSL essentially boosts the speed on the voice line to make it suitable for data transmissions. However, the main draw is almost always price. Some DSL lines for business can run as low as $40 per month. DSL is a direct copper connection and is not shared by other users, so speeds stay relatively static. (Cable companies argue that DSL still aggregates user connections before they are split out to the commercial space.) Phone companies often bundle other services, like Web hosting and cloud storage for business use.

2. Cable
Cable technology also uses a copper wire, but it’s intended to carry data and television signals only. And, in recent years, the cable has used a fiber optic backbone that runs much faster. In recent years, the amplification technology used for cable transmission has improved to the point where you can now expect to find a 100Mbps in many areas, even in small towns. Burney says cable is often the best value for business because of the high-speed and reasonable costs – sometimes only about $80 per month up to about $340. He says some cable companies have not added extra services though for business, such as Web hosting or data storage online, which is something DSL providers do offer in a bundle.

3. Fixed wireless
For companies in a rural area or in a city that is not wired for high-speed Internet, another option is called fixed wireless. The idea is that, a local provider sets up cell towers of their own and transmits from a wired connection (usually a T1) over a wireless signal directly to the business. Sometimes, these fixed wireless signal use the standard Wi-Fi you would use on your own Linksys router, but the antennas are much more powerful and the fixed wireless provider adds extra security. Speed soften run much slower than DSL, about 1-2Mbps, but the signal is usually consistent. Costs are much lower than traditional fixed broadband, running only about $30 per month in some cases.

4. LTE
LTE, or long-term evolution, is the new kid on the block. Verizon and AT&T are rolling out LTE access across many major cities like Minneapolis and Chicago, and speeds run as high as 30Mbps for downloads. T-Mobile and AT&T use an older standard called High Speed Packet Access (HSPA+) that pushes more throughput out of an existing 3G network, but speeds run lower. That’s one of the issues with LTE: the speeds you actually get depend on where you are located, the equipment you use, and how many other people are piping data down from the cellular tower. Also, many 4G plans charge a flat rate of $35-$60 per month for 3GB or 5GB of data, and then a per GB overage charge.

5. Wi-Max
Sprint’s 4G service is a good option for any business that is constantly on the move, says Burney. This includes landscapers, plumbers, those in real estate, and many other business categories. Wi-Max, which is the technology that Sprint uses, runs over a dedicated wireless signal. The main difference between Wi-Max and the signal you get on your phone has to do with the spectrum. Think of spectrum as the frequency for the radio signal – Wi-Max runs on the 2.5GHz band and is only used for data. Speeds run as high as 10MBbps. Like LTE, Spring 4G service charges a flat rate of about $30-$60 for a specific amount of data, like 5GB, and then an overage fee of you sue more than that.

6. T1
Any businesses with a massive appetite for consuming digital media, downloading large files, storing data in the cloud, or streaming content on the Web should stick with a traditional T1 connection. Burney says a T1 or a direct fiber optic connection is still the best fit for those with high-throughput needs. These more expensive connections – sometimes as high as $1000 per month – are less susceptible to latency because your connection is a dedicated line directly from the operator in most cases. (Latency is a fluctuation in speed that can occur when too many users are on the same connection.) There are no overage charges, so if your company consumes a data, there are no extra costs. Speeds are not jaw-dropping – we tested a T1 line in a commercial space that only ran at about 1MBps.

Last updated: Sep 13, 2011

JOHN BRANDON | Columnist

John Brandon is a contributing editor at Inc. magazine covering technology. He writes the Tech Report column for Inc.com.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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