Saturday, October 20, 2012

100 mbps Residential Internet vs 100 mbps Business Internet..Why the Price Difference?

“Why can I pay ~$115.95 at home for 100Mbps internet download speed but 100Mbps download speed for my business is $2800 or more per month?”

This is a great question and becoming more and more popular as people look for high speed internet access.  Let’s take a look at the reasons behind it.

A view of a typical 100-500 mbps fiber cable
In residential areas, there are multiple families on a single street or in a specific block.   The local carriers will typically install a large capacity “pipe” or cable into a central location in a neighborhood and then divide the bandwidth amongst their clients.  The large capacity cable will usually be in the 500Mbps range.  The 500Mbps pipe would cost the carriers ~$4,000 in monthly expenses to install and maintain at a reasonable profit level.  (Remember, the carriers are in business to make money.)

Before we go any further, it’s important to understand the difference between “asynchronous” and “synchronous” transmission capabilities.  Synchronous transmission refers to communications where the sending and receiving speeds are exactly the same.  Asynchronous transmission has different speeds on the sending (uploading) and receiving (downloading) ends.  This is the key to understanding the costs differences we are discussing.

Now that we understand the difference between “Synchronous” and “Asynchronous” let’s continue.  At your home you may select an internet plan with “Up to 20/5 download upload speeds”.  Now exactly what does this mean?  First, understand you are NOT getting a direct link to the carrier, rather you are on a type of shared service.  The carrier will split off a portion of the large capacity pipe going down your street and put a “drop” (the drop is the connection from the pole to your home) in to give you internet access.  If you read the fine print, it will say “speeds not guaranteed”.  They can’t guarantee speeds on this type of service because they are dependent on how many users are simultaneously using the pipe in your neighborhood.   You can almost always see the difference in performance at 3:00 pm vs. late night or early morning.  Why?  Because schools get out at this time and the students are all doing their homework, using the internet.  You MIGHT get the 20mbps download and 5 upload speed at 3am when you’re the only one in the neighborhood using it, but I doubt it.   Some carriers are even offering businesses 100 mbps download, 10 mbps upload for under $500 per month.  Not guaranteed speed, but it sure sounds good.  I wouldn't want my business with 15 or more reps running applications using it though.  You'd better have a good backup program for them.  They'll have plenty of spare time waiting for the screens to move.

You can check the actual speed of you connection for free at  Here’s the one from my home connection at 3pm on Saturday……

The carriers will also provide a residential type router (they're not very expensive, which is why the carriers are willing to send you a replacement whenever you report trouble).  How many times have you called to report a problem, only to be told to “Unplug the router for 30 seconds, then plug it back in?”.  If that doesn’t work, you’ll have to usually have to wait to have a replacement router mailed to you.

Now let’s look at your business.  With true “Business Class” a carrier dedicates a single large capacity “pipe” to one customer and will guarantee the 100mbps/100mbps speeds. (Don’t get fooled by false claims from sales people about their service being “Business Class”.  Remember asynchronous vs synchronous.  If the carrier is quoting you 100mbps/10mbps speeds, this is merely residential service masked as business class.  True business class has synchronous speeds.)    Business class service comes with a business class router which is capable of being troubleshot remotely and will rarely fail.  These routers are substantially more expensive and far more functional than the ones you get at home.

If you want a great question for the sales rep pushing business internet at 100mbps/10mbps speeds, ask them what their guaranteed MTTR is? That's "Mean Time To Repair" should you ever experience a outage.  I'd love to hear what you think of their answer?  True Business Class internet access should have a MTTR of no more than 6 hours before credits are issued.

Finally, let’s look at the pricing.  On residential service, the large capacity pipe (in this example let’s assume 500mbps) is broken down for multiple residents use.  At 20/5 speeds, with only lower speeds guaranteed (remember the fine print), they can put up to 100 customers on one pipe.  100 customers @~$115 per month equals $11,500 in access fees.  This leaves the carrier with a tidy profit.

The true Business Class pipe is typically priced in the $4,000 (based on bandwidth & distance to the central office) range per month, equaling the price we talked about earlier to provide the 500mbps capacity and maintain a reasonable profit level in the residential neighborhood.

There are certainly other factors that go into the access costs and reasons behind it but we’ve touched on the high points.  As many carriers have exited the small to medium size business markets and no longer maintain a field sales staff due to profitablility issues, be cautious when working with a field sales rep offering "Asynchronous" service as "Business Class".  It's true, it comes at a lower price, but you get what you pay for.

If you need additional info or have questions, please let me know in comments and I will try and address them.  If you want to contact me directly to discuss the options you may have for internet and/or cloud access for your business, please complete my “For more information” form or email me at


  1. I really like it when people come together and share ideas.
    Great blog, continue the good work!
    Here is my webpage ::

  2. Thank you for the auspicious writeup. It in
    fact was a amusement account it. Look advanced to
    far added agreeable from you! However, how could we communicate?
    My website ::

  3. These are in fact impressive ideas in regarding blogging. You have touched some pleasant points here.
    Any way keep up wrinting.
    Also visit my web-site :: make money online work from home

  4. Hi just wanted to give you a quick heads up and let you know a few of the images aren't loading properly. I'm not sure why but I think its a linking issue.

    I've tried it in two different web browsers and both show the same outcome.
    Also visit my web blog :

  5. I used to be able to find good info from your articles.
    Have a look at my weblog ... Dora The explorer clip art

  6. Touche. Solid arguments. Keep up the amazing effort.
    Also visit my blog post - cash advance loan illinois

  7. Hi there! This blog post could not be written much
    better! Looking through this post reminds me of my previous roommate!

    He always kept talking about this. I will send this article to him.
    Pretty sure he'll have a great read. I appreciate you for sharing!
    Feel free to surf my webpage top work from home jobs

  8. fantastic points altogether, you just received a new reader.
    What may you suggest in regards to your put up that you made some
    days ago? Any sure?
    my webpage - legitimate Work at home Job opportunities

  9. Hola! I've been reading your web site for a long time now and finally got the courage to go ahead and give you a shout out from Lubbock Tx! Just wanted to mention keep up the great job!
    Look into my weblog ... earn money online from home

  10. Good day! I simply want to give you a big thumbs up
    for your excellent info you have here on this post.

    I will be returning to your site for more soon.
    Here is my web page ; legitimate ways to make extra money

  11. Hello, of course this paragraph is genuinely fastidious and
    I have learned lot of things from it about blogging.
    My blog post :: Work at home Online

  12. Keep this going please, great job!
    Feel free to surf my web-site :: legitimate work at home part time jobs

  13. Its like you learn my thoughts! You seem to grasp so much approximately this, like
    you wrote the e-book in it or something. I believe that you simply could do
    with a few percent to force the message house a little bit, however instead of that, this is wonderful blog.
    An excellent read. I will certainly be back.
    Also visit my web site :: web design miami beach

  14. I'll right away snatch your rss as I can not find your email subscription link or newsletter service. Do you have any? Please permit me understand in order that I may subscribe. Thanks.
    Also visit my web blog :: sci-fi book blog

  15. It's awesome designed for me to have a site, which is good for my know-how. thanks admin
    My webpage: Buy Targeted Facebook Likes

  16. Incredible story there. What happened after? Take
    Also visit my website ; creative ads

  17. Incredible story there. What happened after? Take care!
    my site: creative ads

  18. Oh my goodness! Amazing article dude! Many thanks,
    However I am going through difficulties with your RSS.
    I don't understand the reason why I am unable to join it. Is there anybody having identical RSS issues? Anybody who knows the solution can you kindly respond? Thanks!!
    My website > i need extra money

  19. Incredible story there. What occurred after? Good luck!
    Also visit my site affiliate marketing

  20. Hi my friend! I wish to say that this post is awesome,
    great written and come with approximately all vital infos.
    I'd like to look extra posts like this .
    Also visit my page ... lifestyle

  21. Today, I went to the beach with my kids. I found a sea shell and
    gave it to my 4 year old daughter and said "You can hear the ocean if you put this to your ear." She put the shell to her ear and screamed.
    There was a hermit crab inside and it pinched her ear.
    She never wants to go back! LoL I know this is totally off topic but I had
    to tell someone!

    My web blog ... Home Staging Minnesota

  22. Experience growth and profitability by promoting a strong corporate identity and marketing your products and services on the Internet. Internet marketing is the practice of promoting your company on the Internet with an easily understood, easily navigated, and easily accessed it

  23. Great information. It is very useful content for me. Thank you.

    Just click here for Quickbooks software technical support

  24. You will be contended with the acquired services, so call up soon and find immediate response from the support guys. There will be assurance for attaining the best solutions, so chat with tech experts and they will let you overcome many unknown errors, emailing issues etc in few minutes.

  25. are the leading manpower consultancy located in Delhi/NCR can help you with the best jobs as per locations and requirements

  26. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts.
    hacking forum

  27. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts.
    adsl speed test

  28. Pune is one of the fast developing commercial and residential cities in India. Pune is rising in the real estate business and you can come across a lot of builders in the city right now. Full service property manager

  29. The cache is made up of recently queried names and entries taken from your HOSTS file.The cache contains both negative and positive entries that we can hack to help speed up internet connection.
    visit this page

  30. Miner Capital Funding, LLC is a reputed finance company providing commercial real estate loans to their clients. guarantor loans

  31. The bar is set high for every one of the bloggers out there.
    jio gigafiber

  32. Greenbox Capital is your access to working capital now. Get approved for up to $250,000 cash. New businesses in operation at least 6 months with minimum $7,500 average monthly revenue over each of the past 3 months can qualify. Low credit scores, liens and bankruptcy OK. Merchant cash advance

  33. Awesome is the most appropriate word to portray this blog.
    Binance affgadgets

  34. In this way, PCs are setting down deep roots and you have to figure out how to advertise utilizing one.calgary Internet marketing

  35. As should be obvious the Internet is a veritable confuse of interconnected systems.

  36. This comment has been removed by the author.

  37. There is a general notion that freeware software will not work but this is not true. You can try out "Real Link Finder". Although a freeware, it works pretty well and can be very helpful. The interface is simple and easy. Shane Perry Marketing

  38. This may come as an astonishment yet Romania is a problem area for organizations that might want to set up their web have. On account of the quick internet speed for history search

  39. When it comes to home construction, the firm that you can depend on carrying out this project is a residential construction company. construction contractors los angeles

  40. Ideally, you want to build in an area that you can think of as a refuge, a sanctuary, a place that really takes you away from the unpleasant things in life. Cachet Hotel Group

  41. Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article.I will make sure to be reading your blog more. You made a good point but I can't help but wonder, what about the other side? !!!!!!THANKS!!!!!!

  42. Ask Free Question Related To Vashikaran Solutions, Black Magic Solution, Black Magic Removal, Inter Caste Love Marriage, Love Problem Solution, etc. We Are The Vashikaran Specialist Baba Ji. We Will Be Happy To Answer You Free Of Cost. Visit Our Website www.Lovevashikaranexpert.In Contact- +91 99157O7766

  43. You made some decent factors there. I regarded on the web for the difficulty and found most individuals will go together with along with your website. digital marketing agency singapore

  44. Thanks for sharing the info, keep up the good work going.... I really enjoyed exploring your site. good resource...
    john faraday

  45. Quite informative and the interesting blog for everyone, I simply loved it.

  46. Homeowners usually consider home improvements for one of the following reasons. Martyn Pattie

  47. Your family has grown and you need more space. The London decorators

  48. The blog resembles a sea, I wish to suffocate in.
    phone number search

  49. Thanks for sharing the post.. parents are worlds best person in each lives of individual..they need or must succeed to sustain needs of the family. moving company

  50. This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value of providing a quality resource for free. debestevpn

  51. The expansion of the web, and also GPS route frameworks, sent the correspondences enterprises stunning to the bank under the heaviness of the cash being made. bobsweep

  52. This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information. Keep it up. Keep blogging. Looking to reading your next post.
    speed test charter

  53. Do The Internet Marketing And Web Development Experts Build Websites To Web Standards? business

  54. Not A+ but getting there. Now, a week later I can see I was really more of a C or D student in the planning department read here

  55. They went to the fore after articulated utilization of innovative procedures. They were unanticipated and are absolutely lamented basically in light of the fact that they take as much as they offer from the general public.Bobsweep robotic vacuum cleaner and mop