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Why Are T1 Lines Still Expensive?
badfrog asks: "Over the last 10 years, DSL and cable modem has upped its speed (although in some instances only slightly) and dropped its price. However, the price of a T1 has stayed almost exactly the same. If you had asked me 10 years ago, I would have predicted any geek that wanted to would have fiber or their own T1 line to the house by now. What is with this sad state of affairs that a 'business class' 1.544Mbit connection is hundreds of dollars more than a 6Mbit cable connection? Is it a legitimate case that a high upload rate should increase cost so significantly?"
Why do you even ask this question?
The difference is clear. A T1 guarantees you your bandwidth. Both DSL and Cable do not. You usually get it, but that is only because others only use a fraction of what they are "allowed" to. Look in your TOS, you'll see that they do not guarantee the speeds, they are "averages". So essentialy, your ISP pays for 100Mbps and sells 5000Mbps to 1000 customers (Each 5Mbps, but in reality they get only 0.1Mbps). (Numbers pulled out of my you know what). If everyone would start downloading like crazy at the same time you'd get congestions. The fact is that it's not the bandwith that is interesting with DSL/Cable but the fact that it is always-on.
When DSL started here, it was only 256kbps/64kbps for quite a lot of money. We made the calculation compared to our average ISDN Internet usage (that was per minute) and the price would be the same or slightly higher. Sure, the higher speed was appealing, but the fact that we knew we payed a flat-fee for unlimited interet usage and always-on made it more attractive. That was why we were early adopters, not because it was faster. After all the ISDN 64kbps was plenty of fast back then. It did change our internet habits though: checking the email in business hours was a no-no. We started to check our mail after waking up ;-)
I heared that in Italy you can get a T1 for cheap, but I'm sure it comes with no guarantee.
Ahhh...the great dumpster continuum. Many a free computer will be found there. -- sowth (748135)
They're so expensive because there's not alot of competition for them, and if you need it, you cant live without it.
You dont have the option of moving to a Cable connection, or even several, because of the need for so much upload. You're stuck. And there's no incentive to lower prices.
Vacuum tubes are expensive because its hard to make a vacuum tube that has any degree of reliability. The fact that transistors do the same job and cost dirt has little impact on the difficulty or cost of making vacuum tubes.
T1s are expensive for the same reason. The 15 meg FiOS service at my house actually costs Verizon a lot less to build and maintain than the multiply repeated 1.5 meg T1 that preceeded it.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
It's not the speed.
With a cable modem or ADSL line you'll have no SLA. It'll be "if it breaks, we'll fix it when we get around to it, possibly within three working days". With a T1 or similar line you'll get a service level agreement for a guaranteed rapid fix. If you get DOSsed, you won't just get thrown off the service, they'll work with you to stop the DOS attack etc.
Also, contention - with ADSL or cable you'll be sharing that bandwidth with perhaps as many as 50 other users. A T1 will be uncontended.
It's also expected that T1 users will be heavy bandwidth users, which is reflected in the price.
Oolite: Elite-like game. For Mac, Linux and Windows
Most people in the US are stunned to realize that broadband access is often cheaper and faster in "foreign countries" with greater penetration. Most of my fellow Americans don't realize that compared to not just the UK, France, and Japan, but places like South Korea, we're getting rooked.
Leave the gun, take the cannoli -- Clemenza, The Godfather
From the "I'd rather post to /. and have the editors post this topic than enter it in google" dept:
i ve
http://www.google.com/search?q=why+are+t1s+expens
First 10hits are questions on "Why is a T1 more expensive than DSL?"
Must be a slow news day.
(i know this is a troll but, "ask slashdot" questions should not be answered with the FIRST TEN hits in a google search).
I have a few customers with T1s, and they're paying about six times what they'd pay for my company's wireless service (which would be a faster connection to boot). Part of that is the fact that I have to pay the telco for that T1, obviously, but even without that they're still paying a LOT more than they would otherwise.
However, it's a dedicated connection from us to them. It's not a shared connection at any point (as most cable modem and wireless networks, and some weird DSL networks, are). Until it leaves my network entirely, I do my darnedest to ensure their traffic gets high priority within my network (with QOS and other similar voodoo). There's a dedicated router here, just for them, with a spare ready to be swapped over in about five minutes if the hardware should fail. (Cisco 2500s are down to about twenty bucks on eBay, why NOT have spares?)
As an aside, every T1 comes with my cell number, which means you get pretty much the best service I'm able to provide. Because I really don't want to be bugged after hours.
It's not the upload capacity, at least for my customers; they follow normal "small-business" traffic patterns where uploads are about 10% or so of their traffic.
Maybe some of it is just the novelty/prestige of saying "I have a T1," which sounds impressive because, hey, a lot of folks don't even know what that means. But most of it, I'd wager, is the fact that it's a dedicated, reliable connection (my customers' T1s have about two hours of downtime in the last four years), and sometimes that extra nine is worth it.
The T1 I purchased in 1996 was $2000 roughly from Sprint. Of that $600 was GTE/Verizon's charge for the loop (2 pair). In 1999 I upgraded to a pair of T1 circuits (bonded) the cost was $2300 total, with $300 per loop to Verizon roughly. Then we split our connection and the Sprint T1 of 2002 cost $975 with $180 of that for the Verizon local loop. So the T1 cost has been dropping. But now the product is not in as much demand. In 2005 when we were moving our ISP to a place where bandwidth was cheap (10-60 USD per megabit/sec depending on the provider we'd chose, we reneted space plus got bandwidth and lost the overhead for the redundant power and HVAC (bundled with the space)), then Sprint offered $655 for a T1.
So T1s have been steadily dropping in price. The local loop charges however are moving upwards as clean copper is getting scarcer in some regions and the install of the box to take fiber and supply a T1 has to be accounted for in the local loop charges now. I have seen deals for $395 all in on the web however. And in the case of Sprint with had a committed information rate of the full T1. The CIR clause will cost a bit on your contract as well.
- Tjp
I am in wallow with my inner money grubbing capitalistic pig. ... Oink!
Saying that T1 prices haven't changed is crazy. Of course they have changed! 7 years ago my company was paying over $1000 per month for half a t1 (before broadband was really available). Since then we've gone to full T1 for $800 and now a dual bonded T1 at 3mb up and down is at that price. Speakeasy has full T1 for $300 per month. Of course its more expensive as its a guaranteed service , a loop must be brought to your location, and equipment like the dsu is spendy. But saying that the price hasn't changed is ridiculous. The price has changed more than broadband prices in my opinion.
Is that DS-1s are highly flexible. You can provision a DS-1 a number of different ways. For example you could do 4 channels for data (256k) 12 for voice, and 6 as a private link to another office. Well, the hardware on the back end for all that costs money. That's there regardless of if you want it or not. If not, it's not a DS-1 line. Same reason ISDN is expensive. It's not the exact same and isn't as many channels, but it is a similar technology. Even if all you want an ISDN line for is 128k Internet, you are still getting everything else that one implies, which is quite a lot (a BRI ISDN line is two digital phone lines with all the features).
The old circuit switched digital phone shit is expensive. That's the reason we are moving to all packet switched technologies like VoIP. Much less is needed to run voice, net, video, and VPN over a single link if it is all done over IP. However DS-1 allows all that stuff, but can do it at a lower level. You can break out individual channels and use them for different things.
If that sounds like it's kinda useless, well, it is these days. It's legacy technology more or less. In 50 years, we'll probably see very little if any of it left. Everything will come over an IP connection, and the lower level will be a simply point-to-point with an ISP. However at this point, if you get DS-1, you are paying for all the other shit. Better to find another technology for the physical and datalink.
A man was complaining about his life to his clergyman.
"I was a hard-working clerk making $30,000 per year. I was frugal, living carefully, saving my money, and I was happy and content.
Then one day I fell in with some shady characters and I got suckered into a high-stakes poker game. That was my ruin. Now I am anxious, stressed, and miserable."
His friend says "So you fell into temptation and lost all your savings?"
"No, I won, and like a fool I bought this lousy Wireless internet company."
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I work at a canadian telco and if I ever want to placate customers about prices I just quote them US high speed prices. They are ussually four times as expensive for the same service. ADSL 3.0 MB is 39.95 CND here with great up time and very low saturation. I get 300KB downloads almost all the time.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
When I bought my first T1 back in '99, it was about $1200 per month. It was from Shore.Net (now Primus), and it replaced a more expensive 256k circuit from UUnet. In 2001, I bought a second T1 from Sprint for about $950. Nowadays, I buy them for my clients (usually from Speakeasy) for around $400 or less. I'd say that's a pretty big price drop. A dual bonded T1 (as another poster mentioned) is under $800 - well lower than a single T1 cost a few years ago.
Sure, DSL is cheaper, but you get what you pay for to a certain point. Most importantly, ADSL is typically restricted to 768k max upload speed (I can get commercial cable Internet with 1.1 upload around here) unless you get SDSL (much pricier), and then you basically have a T1 without the service guarantees.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
You don't oversubscribe the T1, but you can oversubscribe uplink on the router that all the T1's traffic goes through to get to the world (the ISP's OC12, whatever).
I've seen it done, and would not be surprised at all if the majority of tier 1's do it. It's a huge waste of money to assume that all your customers will use all their bandwidth all the time.
The only added service a T1 buys you is a more sympathetic ear when problems crop up.
You're paying for the guy on the phone, when the circuit goes down, to say "yessir, it'll be up in less than 10 minutes". And mean it.
Why is it that many people who claim to support standards have such atrocious spelling and grammar?
Let me count the ways.....
1) T1, down at 3AM saturday. No problem, people are working on it.
Business class DSL: Bawahahahahaha...call who?
Cable: We don't work weekends.
2) Reliability. The infrastructure difference between DSL and Cable vs T1's are incredibly different.
T1's are simple in comparison compared to a DSL or Cable infrastructure. Too many people and too many things that can go wrong.
When I run a NAGIOS report for all my DSL lines and Cable lines and compare it to my T1 line over a complete 365 day interval:
My T1 had one incident in July of last summer with a direct lightening strike, was down for 3 hours. Didn't even have to call anyone, they had people working on it Sunday evening, and I got a voice mail it would be up in about 3-5 hours.
I have Sangoma cards in my Linux routers, and from what I can tell there was also a down/up event last year for about 1 second in my logs.
DSL line: It has had over 20 down events which I would call momentary lapses, 13 outright drops for 30-40 minutes at a time, and 80-100 quality alerts that indicated dropped packets or packet loss. I have two NAGIOS servers too, one for monitoring the internal network and one to monitor the outside network.
I made the NAGIOS box to monitor the ISP's so that I could tell if they were having an external or internal problem with thier networks.
6 times I had to dial in and remotely login to the AC strip and dump the power to the DSL unit to reset it, which would then "fix" whatever it was that made it loose its marbles.
One instance one of my facilities was down for almost 3 days, no DSL service. Something happened when SBC upgraded the line, as I asked SBC for a bandwidth increase. The SBC rep told me it was "standard practice" to change your IP address space with a line speed increase.
WT? When I pointed out changing the static IP's without telling your customers could have adverse affects on businesses VPN links, I got the "Well, thats what we do." I prompted told them to put the service I had back in place, they couldn't. They erased the passwords on the DSL modem and didn't have them.
They wanted me to drive 35 miles to a facility to put the password back into the modem.
I promptly dropped the DSL service. It didn't bother me anyway as all my locations have cable and dsl, linked through a BGP topology.
I also had the DSL modem replaced 8 times in the last 2 years at all 8 of my DSL/Cable facilities. The speedstream units suck arse. The netopia units are much better, but they still screw up once in awhile.
I even update the firmware myself, doesn't seem to make any difference so I stopped doing that.
Bottom Line: DSL saves money, it certainly does....but it isn't a 24x7 service, the customer service for business class sucks. For what you get with SBC business class cable its REALLY overpriced.
In fact, I would not call SBC business class cable anything remotely associated with "business". Its a consumer line with static IP's.
SBC can cackle all they want, but don't buy from them if your application needs anything but casual line use. It was so bad I had to buy cable as well so I could keep my facilities up 24x7.
This isn't limited to just one facility. I have Linux BGP routers in 10 facilities spread out over 50 miles. Every SBC facility equipped DSL service has the same issues.
Cable: Cable is better than DSL, only had 12 incidents. All of them related to the fact that the cable company keeps changing the signaling on the modems as the seasons go by. So, all 12 incidents were related to high packet loss due to bad signal. When they change the signaling to the cable modem, the line freaks, and they have to send a tech out to install a filter on the line. That must get REALLY expensive.
Cable is better, but running a BGP topology with multiple redundant pathways presented problems with cable and DSL.
For example, as our business grew ove
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
The parent is correct. You seem to be the one a little out of it. And snidey at that.
T1s are point-to-point circuit switched connections. The Internet only factors in if one device on that point-to-point connection happens to be a gateway router.
Being point to point, it's isolated, secured, easier to secure, and probably guaranteed via some policy or contract. You don't share with no one.
DSL has a same setup; you don't share your connection like cable internet. However, with DSL, you only have a closed circuit between you and an isp. To reach your office across the state, the connection has to traverse your ISP's routers and distribution systems then to your office's. Do a traceroute one day.
With a T1, the closed circuit is between you and your office cross-state. Your ISP only uses layer 2 switching to make sure the circuit takes the optimal path. Once it's connected, it's locked in. And unlike internet via DSL or cable with your ISP in the mix, TCP/IP doesn't have to factor in at all if you don't want it to. You get your choice of protocols for addressing and transport.
You seem to think because since you saw some guy hooking up what looked like a phone jack to your buddy's computer that you're en expert in the field and have the right to be a pretentious dick about it. Sorry to disappoint you.
In this case, the medium is not quite as important. The cabling is nothing much more then a polished POTS line. However, you still have the other 6 layers of the OSI model to think about.
First, a technical detail. T1 lines send their digital signals over lines with high-current, constant DC power. Without a correspondingly high load resistance, the net effect can send hundreds of DC volts through whatever gets plugged in. Don't believe me? Feel free to stop by my data center, lick your finger, and run it across some T1 cross-connects. That's how a lot of old phone company techs look for vacant pairs on trunk lines. It's a lot faster than busting out a multi-tester.
Meanwhile, the equipment that phone companies use for T1 lines is, as someone said, expensive. It's also on a 30-year depreciation cycle. Until that cycle is up, don't expect prices to come down much. Some companies, like MCI, have already gone through a bankruptcy and written off a big chunk of that depreciation, so they might be able to do better, but only if they own the gear they're using. Any telco buying capacity from a baby Bell is going to have to pay (and charge you) the going rate.
Which brings me to the biggest reason for high T1 costs. The price is regulated. T1 lines get billed based on tariff schedules maintained by each state's public utilities commission. That way, small telcos (competitive local exchange carriers, to use the technical term) can theoretically compete with the big guys by selling you comparable service at a comparable price, often by reselling services actually being provided by the baby Bell, with them simply acting as a middle-man.
For the most part, the price isn't the result of supply and demand, or bandwidth guarantees, or idiots who pay more than they should. It's the result of lobbying by the telco industry. And, being regulated by the government, the price is unlikely to ever go down much. The only real competitive pressure on price is coming from MCI and other telcos that are able to give you a heftier discount because of owning their own infrastructure and having a lower cost burden. The tariff schedules are the same for every T1 within any given geography, regardless of who sells it to you, but some telcos can offer bigger discounts off of the tariffed rate if they have lower overhead costs. The effect of that lower cost structure is most noticeable in "lit" buildings, where telcos have large, SONET multiplexer units inside office buildings aggregating all of the data and voice traffic onto fiber and ensuring it stays on their own network rather than a competitor's. In those locations, the equipment is new, with much more capacity at a much lower cost than the gear used for buildouts in the 1990's. There also aren't any third parties involved insisting on a cut of the action.
I don't know if this is worth mentioning, but I'm about to upgrade to a 10 mbps from the 1.544 T1. I think its a new not available everywhere low end OC3 DIA line over copper. Thats about 6.5 times the bandwidth, and about twice the price of T1.
Its taken a while to install (last message from xo was that it was running at 100 mbps, I didn't see the problem) but they also said I was the first in my area to get it.
Worth a look, xo.com
I work for a telco, and while I'm not privy to the marketing decisions that go in to the whole thing, I can give the reasoning as I've always seen it.
T1s do an amazing job, they are rock solid, and work at distances that DSL simply can't, they have guaranteed bandwidth and service level agreements that involve penalties to the telco if they go down. For companies that truly NEED that connection they're irreplaceable.
All that said, for an awful lot of businesses our DSL packages at 4meg down and 1 meg up are plenty, and a fraction of the cost.
Now for the reasoning, T1s are a royal pain from the telco side of things, they work so well because they use such high powers to make sure that they are heard (close to 300V instead of 52 for telephone) but this causes all sorts of trouble, due to the crosstalk these things put out every T1 line that's installed reduces the number of ADSL customers we can put in the same cable, one T1 line can easily destroy the ability to carry DSL in the same binder group (25 pairs) and over longer distances or with several T1 lines can wipe out the whole cable for DSL. This is a major problem for us, so if we're going to have to work around these sorts of issues, we want it to be worth our while. that doesn't even go in to factors such as the equipment, a DSL modem costs about $50 or less these days, but a T1 "modem" is in the thousands, same deal with the equipment at the other end of the line, then you add the line conditioning that has to be done on longer lines when provisioning a T1, and the list goes on.
DSL is a great product, if you don't absolutely need a T1, then by all means take advantage of the fact that DSL lines are dirt cheap these days.
but when you need a T1 and nothing else will do, don't complain about the cost, it is after all your choice.
T1 lines send digital signals with almost NO current. This is due to the balanced encoding used on the line. There are two primary encodings used in North America (Europe has their own standard): B8ZS and AMI. These encodings ensure that the number of positive signals sent are roughly the same as number of the negative signals sent, resulting in an average DC voltage close to zero. While I don't doubt your anecdote about techs using their fingers to test if a line is live, the signal they experience has more in common with AC than DC.
The electrical specifications of a T1 show that it uses {-12, 0 12}V DC as the signaling alphabet. This is not the "hundreds of DC volts" you claim (maybe you were confused with the POTS system which uses 90V RMS ringer signal).
I don't know much about the politics of the system (I've only designed endpoint equipment and had little interaction with customers), but I know your technical details were rather specious. Do you have any evidence to back your other claims?
But you do most certainly oversubscribe the connection onwards from wherever the lines (be they t1 or adsl) terminate.
Put differently, if you've got 10.000 subscribers for 1Mbps ADSL, you most certainly don't hook these into the Internet using a 10Gbit link. If you did, you'd be having 95% overcapacity on average, and probably 80% overcapacity at the peaks. (i.e. you'd literally *never* use more than 20% of your bandwith)
Same applies if your customers come in over T1-lines.
Now, there's still differences. Typical el-cheapo consumer-isps tend to simply accept that their lines spike for 10% or more of the time. In other words, if their actual load is 100Mbps average, 500Mbps peak, they'll buy perhaps 200Mbps, and simply accept that nobody gets more than half their rated speed if surfing at peak times.
ISPs with a higher service-level try to keep their capacity around peak. Which means that if they calculated correctly, you'll "always" get your rated speed. You *may* on occasion experience sligthly less if they miscalculated.
Insane ISPs, like Uninett has a target bandwith of 150% of the highest experienced former peak. In other words, aslong as *now* doesn't have 1.5 times the highest load experienced in the past, you'll get your rated speed. Notice that this too is probably an order of magnitude less bandwith than you'd need if you did not overprovision.
Not overprovitioning is a lot like building roads as if everyone who owns a car would be driving it 24/7/365. If you did, you'd be spending 10 times the money on roads from whats really required.