Broadband - a Guide for Small Businesses
by Colin Bryant, TelecomsAdvice
This ‘Feature’ was the basis for the DTI’s UK Online for Business publication of the same title. See also the Broadband update information at the end of this ‘Feature’ and ‘Information Sheets’ on connectivity generally.
Why would a small business want broadband? What is the 'killer application'? You might have heard about 'video on demand' and similar multimedia content but how many businesses need that? Indeed, many people streaming video would soon swamp a network. In our view the 'killer application' is simply that a broadband connection allows the Internet to work as you would expect it to:
- it's always on - no messing about waiting to connect and perhaps getting engaged tones
- email is sent immediately and automatically arrives every few minutes
- webpages generally appear immediately - so much less frustrating than a dial-up
- because it is always connected you can allow remote workers to get secure access to your network from their dial-up or mobile connections
- increasing use of 'voice over IP' (voip) could bring savings on phone calls - particularly international calls.
Depending on the nature of your business some benefits will be worth more than others.
A survey in May 2001 covering 110 existing Broadband users stressed the real business benefits to SMEs.
- More than a third of existing Broadband users have already seen cost savings and two-thirds expect to see them.
- More than half expect positive bottom line impact - 16% see it already. This may be increased business opportunities through better web presence, greater staff efficiency, and better customer service/responsiveness.
- Nearly half have already experienced productivity gains - three quarters expect them.
- People are happier with unconstrained Internet access and faster up/download of work and emails - half the businesses surveyed have seen improvements in employee satisfaction, two thirds expect them.
This all amounts to a big impact in competitive terms - 15% claim extra competitive advantage now, 59% expect more in 1-2 years.
% rating Broadband features/benefits as Important :
What is a broadband connection?
In practical terms, we are talking about an Internet connection which is "always-on", rather than "dial-up", and which allows web pages to appear on screen almost instantaneously. Audio and video can be received as continuous streams and "virtual private networks" can be established with branch offices or remote workers - although there are some limitations, of which more later. Large attachments to emails and transfer of large media files are also much faster to handle than on narrowband connections. A broadband connection can also be made to a private data or multimedia network which may also, but need not, connect to the public Internet.
Mass-market examples of broadband you may have come across are ADSL and Cable modems but the telecoms companies and Internet Service Providers (ISPs) could have their own brand names for these technologies and the services which run over them. Emerging alternative choices may be wireless and satellite.
We will attempt to explain broadband features and business benefits in plain English but we are assuming that you have some experience of the Internet and of the more common terms. Where jargon is unavoidable we refer you to our index/glossary.
Speed of Connection
Broadband, as opposed to narrowband, can be defined in technical terms by the amount of data able to pass through the connection in a given time - say 512 Kilobits per second (Kbps). All other things being equal, web pages will appear significantly faster than with a narrowband telephone modem or single channel ISDN connection which download at up to 56 and 64 Kbps respectively.
A broadband connection is sometimes referred to as a 'big pipe' - carrying data rather than water and in both directions - although download may be faster than upload.
The 'A' in ADSL stands for asymmetric so you can get between 512 Kbps to 2 Mbps download, but only 256 Kbps upload.
Cable modems have download speeds similar to ADSL but may work at 128kbps upload. Some providers offer a range of speeds at differing prices.
Currently available wireless services are flexible, can be synchronous or asynchronous and offer speeds up to 1Mbps.
Mass-market one-way satellite services download through a receiver dish at 400Kbps but upload through a narrowband telephone connection at up to 33.6 - 64Kbps. Specialist two-way satellite services can download at rates between 400Kbps and 2Mbps, and upload through your own private transmitter at up to 256Kbps.
Wireless networks are increasingly available for shared connections between communities and in public locations for mobile connections from a laptop or PDA.
Broadband availability is growing in many areas. See the websites listed at the bottom of this page to get an up-to-date position. ADSL is restricted by the rollout of relevant equipment at the exchanges and the distance of the subscriber from the exchange. Other forms of DSL may provide lower data rates at further distance or much higher data rates with intermediate equipment between the exchange and the subscriber's premises. Cable modems are now available in most Cable franchise areas with some restrictions due to incompatibility of inherited equipment. Cable companies may also provide ADSL, wireless and general Internet and telephone services outside of their franchise areas.
BT's ADSL rollout aims claims to cover 99% of homes and businesses as at October 2005. Other telephone companies' rollout of ADSL largely depends on them taking up access to BT's exchanges as part of the ongoing unbundling of the local loop. Aggregation of demand is being enabled by pre-registration through the BT Wholesale site.
Many service providers' websites offer search facilities, based on your telephone number or postcode, where you can check if your local BT exchange is ADSL enabled. There may be several reasons why your telephonenumber shows as unavailable for ADSL, always try the postcode search.
Wireless services are emerging, which may be appropriate for more rural areas, and wired private circuit leased lines from 64 Kbps to 2 Mbps and more, which have been used for some time for more specialist applications, may become cheaper due to increased competition.
Does your business need broadband? - The business case.
Is a 'big pipe' better? It depends on what you want to do with it! But what are the costs and benefits?
How many networked computers do you have sharing the connection? What quantity and type of data are they downloading or uploading?
If there are more than one or two people using your connection at any one time, or if they are regularly downloading large data files, audio or video, then they will be able to work much faster with a broadband connection.
Videoconferencing and telephony over the Internet improve with broadband but could still be subject to network congestion as more connections are made.
So, at the simplest level, if access to web pages or transferring large data files is, or could be, a significant part of your business operations, then broadband will speed things up. If you are currently using a private circuit or leased line then you may be able to achieve the same functionality more economically with an ADSL, SDSL or Cable Internet connection.
Up to date data:
You may want an "always-on" connection so that you know as soon as possible when email arrives - but email can be subject to delays at intermediate points on the Internet, so it is not always instantaneous - and you can't deal with everything immediately! You can achieve a similar result with a regular, automated dial-up connection; call inclusive (unmetered) dial-up Internet subscriptions provide fixed costs and, if you have ISDN, connections are not delayed by "modem handshaking". See the references section of this ‘Information Sheet’ for sources of more information.
With a permanent connection you can get immediate information updates such as share and commodity prices and currency exchange rates. You can update and be updated with information held on web based servers - your own or your suppliers. Your own catalogue and stock database can be hosted by a specialist ISP with the connectivity and 24/7 back-up resources to support a business critical application, while you maintain and receive information from the server through your economical, mass-market, broadband connection - maybe with an ISDN dial-up to be used as a back-up in case of broadband network failure.
So what else can you use "always-on" broadband for?
In theory, once you have a broadband permanent connection to the Internet you can give remote Internet users access to your networked computers and the information they hold. But this may be against the service providers Acceptable Use Policy and also (since there would be an obvious security risk to its subscribers) your ISP's network will possibly have a "firewall". If you want to make all or part of your office computer network accessible to home/mobile/outworkers, branch offices, selected customers and suppliers or Internet users generally, then you will have to check that it is possible and make arrangements with your ISP. You will probably have to provide your own network security firewall but your ISP or a specialist service provider may maintain this for you at extra cost.
To allow remote access you may also need static IP (Internet Protocol) addresses for your network computers - rather than having IP addresses dynamically allocated and regularly changed by your ISP which is the standard offering.
Hosting your own website?
It may seem attractive to host your own web site on your own web server on your own permanent broadband Internet connection, however, mass market ADSL and Cable Modem networks are not designed for this type of use; it could be prohibited in the service provider's ‘terms’ and may not be technically feasible. Quality of service on these networks is not guaranteed and it would not be wise to attempt to run a 24-hour, 7-day per week, mission critical business operation over them. In any case, connectivity is only one issue to consider - most small businesses cannot afford the overhead cost of a network administrator permanently on call to maintain a web server.
If you want to run a commercial web server then you should explore hosting by an ISP or a leased or co-located server in specialist premises before installing your own leased line. You will still benefit from a broadband connection with the ability to upload content to your site faster than over dial-up modem services.
Online services, software and applications.
Application Service Provision (ASP) can benefit from broadband. ASP can be as simple as using a remote service provider's computers to back-up data, or using a software program on a remote computer on a pay per use basis. In all cases the application will benefit from a faster connection and in practice many services may not be feasible without broadband.
Mass market broadband connections share networks at various levels - e.g. for ADSL, from the local telephone exchange through BT's long distance trunk lines to another interconnected telephone company's and/or the ISPs network, and for Cable, over the cable company's network. Total bandwidth on these networks is calculated to provide the advertised data speeds at a contention ratio of 20:1 for business connections and 50:1 for residential connections.
So your business may eventually be sharing its 512kbps download connection with 20 other businesses comprising several users! For "bursty" applications like web browsing this is probably OK, but it only takes one or two people to start streaming video to their desktops for the network to become congested - and this is before you get out on to the public Internet where the server you are trying to connect to on the other side of the world may have it own connection or computing capacity congested by popular demand.
At the moment early adopters of ADSL and Cable Modems report excellent results - far superior to dial-up modem connections - and competitive pressures should make service providers keen to maintain adequate bandwidth for their subscribers.
First you need an ordinary copper telephone line for ADSL, or a Cable connection, with the corresponding installation costs and line rental.
You may only need a single-user ISP account at around £15-£30 per month but, for all but the smallest businesses, a multi-user/networked account from around £70 per month would be more appropriate. There are no additional 'dial-up' charges but look out fordata download limitations or charges. Prices vary and are subject to market changes so please check the suppliers' literature and websites listed in the references. At the time of writing there is a standard installation cost of around £50-200 depending on type (but there are offers from time to time which reduce this) and there may be additional charges for multiple email addresses and handling, domain name services and website hosting. The installation cost, line rental and subscription can't be avoided but the additional services, if required, can be sourced from other suppliers once the basic Internet connection is in place. This compares to the cost of a dial-up subscription inclusive of call charges from around £10 per month, plus line rental, but which ties up the 'phone line - with ADSL you can use the 'phone at the same time as the Internet.
Current wireless and satellite offerings vary with price according to the bandwidth used, ADSL- equivalent speed services cost around £95 per month, 1Mbps services cost up to £250 per month plus installation fees of £150 or £200 for wireless and £1500 and more for two-way satellite. You don't get a 'phone line but you may need one for a one-waywireless or satellite uplink - and it will not be available for voice calls while in use for the Internet.
On-going and Future Developments:
For rural areas, broadband fixed wireless services will become available as radio frequencies are allocated, planning permissions for aerials approved and commercially viable demand builds up. Satellite download may become increasingly popular as Internet connectivity through digital TV expands. Two-way satellite for qualifying SMEs is being subsidised by National and Local Government in some rural areas. Aggregation of local demand by business communities could lead to, say, one two-way satellite installation being shared over a wireless local network.
Local Loop Unbundling (LLU) will enable more telcos to use BT's copper infrastructure and local exchanges to provide competitive and enhanced DSL services.
SDSL (symmetrical dsl) services are being rolled out in central London and other major cities. Data speeds of up to 2mbps in each direction per pair of copper wires can be achieved (4 pairs could be aggregated to provide 8mbps) and the services are seen as an economical alternative to leased lines. The services can be provided by telcos/ISPs putting their SDSL equipment in BT exchanges or by establishing a PoP (point of presence) near to an exchange and leasing a ‘raw copper’ connection from BT through the exchange to the business consumer.
Mobile wireless services will not become broadband until the third generation (3G) UMTS (Universal Mobile Telephone System) is rolled out more widely – ‘3’ has recently launched its service but coverage is limited and prices have not settled down yet . In the meantime GPRS (General Packet Radio Service) now offers an always-on service with similar speeds to a modem or maybe ISDN. Currently charges are for monthly rental plus usage, i.e. the amount of data transferred, rather than call time.
The information sources in the references section should provide more up-to-date information on these developments.
Updates: (progressively these will be incorporated in the main document above but are noted here to highlight them as new additions)
ADSL self installation
ADSL services can now be self-installed by both residential and business users. As a benchmark, BT prices are here. ISPs other than BT may have different offers or pricing.
Two-way broadband satellite installations are now available Nationwide from BT and others.
SDSL – symmetrical DSL
SDSL services offering upload speeds equivalent to download speeds are being rolled-out to a limited number of exchanges in London and major UK cities using the ‘unbundled local loop’. The services will be limited by distance from the exchange - from 3-7km depending on the actual route (and hence length) and quality of the copper wires and their connections.
SDSL and similar technologies over “leased copper pairs”
Irrespective of whether the local exchange has been ‘unbundled’, Broadband connectivity can be achieved using a raw copper line, leased from BT and connected to a local specialist supplier who in turn has a broadband connection to the Internet backbone. SDSL or similar modems are installed at the customer premises and the local suppliers ‘Point of Presence’ (PoP) which has to be close to the exchange. The service is seen as an economical alternative to traditional leased lines and can aggregate, say, four copper pairs, at 2 mbps, to provide 8mbps in each direction .
References: (not recommendations - we have used information from the following sources, however neither inclusion nor exclusion should imply endorsement or otherwise of products or services. Technologies and markets are changing rapidly and solvency of individual companies cannot be guaranteed. We are not responsible for information published on these websites.)
TelecomsAdvice working in partnership with the former Oftel Small Business Task Force and the DTI's
Broadband – General:
adslguide - gives information on all aspects of ADSL, including details of Internet Service Providers' packages and an availability check.
Broadband Stakeholder Group – a group of representatives of companies and organisations with a ‘stake’ in Broadband – suppliers, consumers, National and local government, unions, etc. - informing Government policy and monitoring implementation. Informational website here.
broadband-help - covers ADSL and cable modem services and includes an ADSL buyer's guide.
net4now - includes details of ISPs broadband packages as well as 'unmetered' and 'free' Internet services.
Bulldog (now part of Cable & Wireless group)
Pipex (now absorbed by Zipcom all but trading uder the Pipex brand)
Bulldog (now part of Cable & Wireless group)
Satellite (two-way and satellite downlink/telecoms uplink):
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