Options Multiply for Small-Business Broadband
Competition between cable and telephone companies means faster internet at cheaper costs.
If you've been using the same business broadband provider for years, now may be a good time to cut your costs or increase your bandwidth by jumping ship. Today competition between cable and telephone companies for business broadband customers is red-hot. As of 2006, more small businesses had DSL (35 percent) than cable (25 percent), but that balance is shifting as cable companies ramp up the speed of their service and push business-oriented broadband/phone packages at compete very attractive prices.
According to Brian Washburn, network services research director for Current Analysis, business DSL plans used to be more attractive because they "bundled in a voice line, unlimited local/long-distance plans and wireless options, while cable was broadband Internet and not much else." Now, however, "cable bundles [for small businesses] are starting to look like the long-established T1 integrated voice/data services from the telco side."
Forrester Research agrees. In a 2006 survey, it found that more than 75 percent of small businesses buy or plan to buy bundled telecommunications services, citing better pricing, convenience, and service. Both Comcast and Time-Warner, for example, offer "Business Class" packages, with Comcast advertising a $99 triple-play of broadband, TV, and unlimited local/long distance calling for small businesses.
Washburn says that cable also has the advantage of being able to offer additional phone lines for a small incremental cost. He sees a sweet spot for cable of 8 to 12 lines, which he calls "a weak point for traditional telcos, where the subscriber must either buy a bunch of analog voice lines with DSL or resort to that costly T1 line." T1 lines typically cost $300 to $400 per month for 1.5 megabits per second of constant, dedicated bandwidth, which can be used for Internet access and multiple phone lines.
Speeds on the Rise
DSL has been catching up with cable in data transmission speed. Speakeasy.net, a leading business DSL provider, offers 8-mbps ADSL2 service for $150 per month, including eight static IP addresses, domain e-mail, and around-the-clock support with a service-level guarantee (meaning that if Speakeasy doesn't fix outages within a set short period of time, it will refund fees on a pro-rated basis). Such guarantees are critical for many online businesses and in the past have been available only with T1 lines. Speakeasy also offers plans with speeds of up to 15 mbps downstream and 1 mbps upstream, as well as 10-mbps symmetrical (downstream and upstream) service in some markets
Meanwhile, alternatives such as Verizon FIOS and AT&T's U-verse are making inroads with small business in the limited areas where they are available, thanks to blazing speeds and low prices. Verizon's 50-mbps download/20-mbps upload business plan, for example, costs $200 per month with two-year contract; the service's 15-mbps download/2-mbps upload option costs as little as $60 per month, or $100 with a static IP address. Verizon promises 24/7 support for business FIOS, but no service-level guarantees.
Cable providers aren't standing still, however. Soon, next-generation cable service will be available-initially at speeds of 20 to 50 mbps, but eventually rising to better than 100 mbps. The updated cable offerings should compete directly with FIOS on speed and pricing. Comcast alone expects to bring DOCSIS 3.0 to 20 percent of its market area before the end of the year.
Location, Location, Location
Your broadband choices depend on your location. In Newton, Massachusetts, business owners can select from among Comcast and RCN cable, various DSL providers, and Verizon FIOS. In Berkeley, California, the options are limited to Comcast and DSL. Other areas may have just one broadband provider.
Though cable prices are easy to check-since most would-be subscribers have only one or two options-DSL prices and service levels can vary widely. To research the business DSL offerings in your area, check out several handy comparison sites. Start with BroadbandReports.com, which posts revealing user ISP ratings for installation, connection reliability, and tech support. Then head over to sites such as BroadbandInfo, BuyerZone, and EverythingDSL for real-time price quotes tailored to your needs.
Before you shop, decide how much speed you want to pay for, both upstream and down (if you host your own Web site, you'll want high upstream speeds), whether you need static IP addresses (and if so, how many), whether you need domain e-mail hosting, and whether you want bundled voice service.
Once you've narrowed down the options, call the companies to quiz them on the details, such as installation time, technical support hours, and router policy (specifically, whether you can use your own). Also decide whether you need a service-level guarantee. If the options in your area don't include service-level agreements, and if uptime is crucial to your business, consider doubling up on inexpensive cable and DSL lines. The redundancy should cover the vast majority of outages, at a far lower price than a T1 line.