Business High Speed Data Solutions Explained

Broadband data solutions for businesses come in many different flavors in terms of the physical interface used to transport the data, the data speed available to you and of course the cost. In this section we explain the different types available to you today to help you determine the most optimum data package for your particular business needs.

Digital Subscriber Line (DSL)

DSL service is a technology for bringing high-bandwidth broadband data service to Small Office, Home Offices (SOHO) and Small to Medium sized Businesses (SMB) over ordinary copper telephone lines. This technology is no different to the one used for residential service. For more information on this option take a look at our DSL guide for home users.


With this technology Internet service is provided over the cable TV line to homes and small businesses. The technology is the same regardless if being used for home or business. You can review our Cable Explained for home users article to learn more.


The T1 carrier is the most commonly used digital transmission line for Small to Medium-sized Businesses (SMB) in the United States. It has a bandwidth of 1.544Mbps in each direction. In other words you will get this full dedicated bandwidth in both your uplink and downlink directions. It is for this reason that it is often used for Data and VoIP traffic. VoIP traffic typically needs around 90Kbps per voice call so it is easy to see that this can be a good option for simultaneous calls. In Europe the equivalent transmission is known as E1. It is very similar except it can run at 2.048Mbps.

One reason this option is popular with SMBs is that they are usually leased from large Telecomm companies who build well defined Quality of Service (QoS) guarantees of minimal downtime into a Service Level Agreement (SLA). However, as you would expect, a premium is paid for this type of data service.

There are also a few variations that you may come across. Fractional T1 is, as you would expect, a fraction of a full line and is charged at a lower rate. A T1 can be thought of as 24 unique timeslots so when you lease a full line, you have the ability to use all 24 timeslots (also referred to as DS0s). A fractional T1 gives you access to a specific number of DS0s. The most common rates are 256Kbps and 384Kbps. The speed may be less than DSL or Cable options but the QoS is in place which can be important to some businesses. Frame Relay is another form and uses a packet switched protocol to transfer data across Local Area Networks (LAN) and Wide Area Networks (WAN). Instead of being allocated a fixed amount of bandwidth, Frame-Relay services offer a CIR (Committed Information Rate) at which data is transmitted, in other words an absolute minimum connection speed. Point-to-point offers the best QoS for transmission over a T1. The SLA guarantees maximum throughput at all times and is typically leased by companies who transfer a lot of private files or for corporate Virtual Private Networks (VPN) and WANs.

One final point to note is that if you need additional bandwidth you simply add more T1 leased lines. Likewise, if you decide to add VoIP you can add another line and all of your packetized voice traffic can be delivered over it.


A T3 line is equivalent to 28 T1 lines (see above) at a speed of 45Mbps. Typically you would see large businesses, universities and web hosting companies lease a T3 line due to the large amount of users requiring access to the Internet and Wide Area Networks (WAN). The physical medium for a T3 line tends to be fiber-optic cable. Note that T3 lines are high enough speed that it is feasible to pass full screen, full motion video over this interface.

A T3 line can also be sub-divided and is known as fractional-T3. Basically one would lease a fraction of the 45Mbps bandwidth available at a lower cost.

OC-3 / OC-12 / OC-48

Optical Carrier level 1 (OC-1) is the designation for a Synchronous Optical Network (SONET) with transmission rates of 51.84 Mbps, using fiber optics as the transmission medium. However the most typical SONET rates found in optical networks today are OC-3 (155Mbps), OC-12 (622Mbps) and OC-48 (2.5Gbps). OC-48 will often be used as the long-haul backbone for Internet traffic containing everything from regular data and VoIP to streaming video.


Ethernet (IEEE Standard 802.3) tends to be the protocol of choice for LANs inside a business, using twisted pair cables to connect computers in a workplace to the local network and to the Internet. These interfaces usually run at either 10Mbps or 100Mbps (referred to as Fast Ethernet).

However fairly recently there has been a push for what is referred to as Metropolitan Area Networks (MAN) which provides carrier-class Ethernet between a business and the Internet Service Provider (ISP) over Ethernet. The interface speed for such interfaces is usually one Gigabit (1000Mbps) hence the term Gigabit Ethernet. A point of demarcation is required between the ISP and end user in order to provide end-to-end Service Level Agreements (SLA). This broadband data connection is becoming very popular for businesses in metropolitan areas.


Integrated Services Digital Network (ISDN) is a technology that is offered by most telephone carriers. It combines voice and digital traffic in a single medium making it possible to offer customers digital data services as well as voice connections through a single "wire" (copper pair) running at a speed of up to 128Kbps. At one time this was very popular for SMBs but with DSL, Cable and T1 services offering higher speeds for voice and data traffic ISDN popularity has been steadily declining over recent years.


Satellite is included here as it is an option for Internet access. However, most businesses would not consider this option unless their location meant that other technologies were not available. We covered this topic in detail in our Satellite guide for home users.

A word of caution on Satellite solutions. If you plan to pass voice over this type of medium you are likely to be very disappointed. The latencies involved are such that the delay in your speech will be very apparent! For more information you can read our article on VoIP over Satellite.

Hosted IP PBX

This is VoIP related but since the voice calls are packetized and sent over your data interface it is worth mentioning.

A hosted IP-PBX is an IP-based management service located at your VoIP service providers network operations center. The functions associated with a hosted IP PBX service are similar to those of hardware PBX systems installed at your business site. The main difference is that your company is not responsible for buying, installing, or maintaining any of the PBX equipment. It is all maintained and upgraded by the service provider thus saving your business significant money in terms of capital expenditure and of course administration costs since you do not need to pay an IT person to maintain it.

What are some of the advantages of a hosted service?

Refer to our Business VoIP section for more information.

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