Monday, February 28, 2005

Why is DSL cheap and T1 expensive?

Apparently my braincells had too little to do tonight and I got off onto the track of thinking: "If I pay $75 for my 1.5 mbps x 768 kbps DSL connection, why then is a T1 $400-600/mo?"

Well, once those neurons fired off, of course some other neurons fired back with the answer. And it's that answer I'm gonna share.

Why is DSL (and cable modem) so cheap? Simple - contention.
Contention - (n.) Conflict that arises when two or more requests are made concurrently for a resource that cannot be shared.
So what does that mean? Well, in the simplest terms, think of contention as the last spoonful of ice cream from a container. It can only be enjoyed by one person. Your DSL connection is the same way. Your (and my) little DSL pipe is connected into a big internet pipe at the phone company (usually a DS3 that's connected in turn to another larger pipe to the internet somewhere else).

Another way to visualize it is connecting multiple water hoses to the same spigot on your house. You can only run so many at a time before the water pressure drops substantially.

In the case of our DSL, that water pressure drop is the same effect as our internet connections slowing down. For the most part, cable modem users notice it first... that's an engineering challenge due to how cable is run to different neighborhoods.

What does all this mean? Well, the phone company (or your cable company) buys a nice big internet connection. As long as no one is using it, it's really fast. The problem comes in that we're not guaranteed any set speed (go read your contract, you're in for a rude awakening). So the phone or cable company can share that one really big pipe with was many people they want to. So if you have 10,000 people in an area all sharing the same connection and trying to hit websites, download music and check email at the same time things can slow down - sometimes dramatically. That's contention - we're all contending for a share of a limited resource. This is also called oversubscription. It's the same concept that leads to "all circuits are busy now, please try your call again later" when making phone calls. The company has a set number of phone lines and internet speed to share. If more people try to use it than they can accommodate, some people get shut out or slowed down.

Now, since the phone companies own most of the really fast internet connections - or at least the wires or fiber by which they are connected around the US - people with DSL don't see this as often as people on cable modems (since the cable companies have to buy internet connections from some telephone company somewhere).

How is that different from a T1? With a T1, instead of sharing that really big pipe with thousands of other people, you have your own private connection into the backbone of the internet. The T1 carrier (if they're a tier 1 carrier) is usually going to guarantee that you will always have 99.9% or higher of your speed available to you. This means you're not fighting with all the other people in the neighborhood to get to the internet. (Now once your traffic hits the internet all bets are off b/c you can't control how your traffic gets to or from the website or other computer you want to talk to.)

And because you're not sharing the connection with so many other people, your T1 skips some of the equipment that would normally sit inbetween you and the phone company if you were on DSL. That makes a T1 feel "snappier".

What does that all boil down to? For residential users, DSL or cable modem is probably more then adequate for most people. For business users, you have to determine how much your internet connection is worth to the productivity of your business. If you can live without it, DSL or cable modem will probably suffice. But if you rely on email or the internet for making profit, closing deals or supporting customers, then a T1 is in order for you. The extra monthly expense is just a cost of ensuring you'll always be able to do business efficiently and reliably.