What Are They Talking About - Broadband?

There are plenty of new words in our vocabularies since the Internet boom.  The difficult part is making sense of the phrases and whether they are relevant - and useful to - small business.  The phrase "broadband" typically refers to the ability to move large blocks of data quickly through broadcast products like digital cable and satellite transmissions.  More importantly for business owners, it also refers to high-speed Internet access over cable and telephone lines.  Unless yours is a media business dependent on transmitting large files quickly and efficiently to end users, most likely high-speed Internet access will be more important to you.

What Is the Difference?

Two of the key points of differentiation are the service providers and the speed of the actual service.  Because we recommend the use of the most advanced firewalls and anti-virus software, when comparing DSL to cable we will not discuss the important issue of data security.  But this is a real issue, no matter what service you decide upon.

Service Providers:  The service components which are most likely to be grouped under broadband Internet access are cable, DSL, satellite and wireless Internet access, which is presently more of a promise than a reality.  Two of them, cable and DSL, are often used by small businesses to connect to the internet at rates faster than 56K dial-up and slower but much less expensively than T-1 or fractional T-1 speeds.  Cable is provided by your local cable TV distributor and DSL generally through your local phone company or some company with an agreement to "piggyback" on their lines, although satellite DSL is also available.

Access Speeds:  There are a couple of essential differences between cable and DSL access speeds.  While cable is inherently capable of greater speeds than DSL, the cable may also be used by other users - from none to many other users.  The more users, the slower the access because all users are limited to the total available bandwidth of the cable at any given time.   In another scenario, if one user is downloading a very large file, all other users on the cable at that time will suffer reductions in access speed.  One final thought when considering alternatives:  cable is usually provided with the caveat that your download speed will be greater than your upload speed.  DSL, on the other hand, is a "my line only" access system.  The speed of the access depends on key variables such as the speed of the phone company's central switches and on how close you are to the phone company's central switch or a remote digital switch.  The farther away you are, the slower will be the access speed.

Do Your Homework

Perhaps the key test of how well either system fares is a the number of users of either service in your immediate vicinity.  Because service reliability can fluctuate significantly from region to region, do your homework by asking users in your local area before you decide to subscribe.  And if email and data transfer is an essential part of your business life, make sure that you ask local broadband users about their experiences with email.  Some cable systems are inexplicably challenged by providing basic email and you will want to know if your provider is one of them.

Broadband Proliferation

A recent market research report by Leichtman Research Group (www.leichtmanresearch.com), a leader in research and consulting on the impact and market proliferation of broadband products, shows that broadband subscribers increased by nearly 1.7 million users during the 3rdQ of 2002. With nearly 17 million by the end of the quarter, expansion was up over 10% from the 2nd Q.  It is clear that the often-promised proliferation of broadband services is finally underway.  Cable broadband is proliferating at a rate twice as fast as DSL and the installed base is also twice as great, with 10 million subscribers vs. 5 million DSL customers.  But what makes proliferation important to small business?

Important For Small Business

What makes broadband proliferation important for small business is the increased availability of Internet access choices.  If your company needs high-speed web access and cannot afford T1 or "frac" costs, then DSL or cable are very likely solutions.  While most research studies like the Leichtman one above look at broadband proliferation with an eye toward the consumer market, to the small business owner intent on getting faster Internet access, that distinction is meaningless.  It is all about delivery reliability, speed and cost.  So, the more broadband users proliferate, the more available and less expensive those services should be.  The more available and less expensive the services, a combination of market competition and network improvements should cause an increase in broadband reliability.  And for larger small business, a decrease in the faster, more robust connections like T1 lines.