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Is T1 Right for Your Business?

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Scott Pimental
February 20, 2007

Scott Pimental
Scott Pimental is an independent telecommunications consultant specializing in working with small business owners to find solutions to their internet, telephone and mobile communications needs. You can learn more by visiting his website at http://www.amtecdigital.com
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The T1 line is a digital transmission service that can be used for carrying voice and/or data. A T1 connection is sometimes referred to as a "dedicated service" as the service is delivered to and from the customer premise from the CO (Central Office) without combining it with other traffic. A T1 connection is established by providing a "loop" or wire from the users premises to the CO where the service provider has equipment. Part of the cost of a T1 is the "loop charge" or the monthly rental fee for the wire that is rented from the local phone company. Once the connection reaches the CO it can access the carriers network and reach any destination.

T-1 provides high speed, point-to-point digital transmission line (up to 1.544 Mbps). This can be used as a single high-speed data channel or it can be split into 24 channels and allocated to either voice or data applications. It is widely deployed and readily available in most regions and although the service is not diminished by distance from the CO, the price is sensitive to distance. This is due to the rental of the loop from the LEC (Local Exchange Carrier). T1 is currently the most common way that large companies connect their LAN to the rest of the world.

Are you ready for T1 service? You may be ready if you have critcal services that need a reliable connection to the internet. If you run ASP services, host e-mail servers or web servers, have over 20 people accessing the internet or use video on demand you should consider T1 access. While it is more expensive that DSL, T1 access is made to support the above applications.

While many people predicted the end of price erosion for a T1 internet connection it continues to fall. Service providers are up against stiffer competition and are desperate for new customers to fill their pipes and turn a profit. Are you ready to negotiate for a rock bottom price? Before you do, consider a few of the reasons for the drop in price on T1 bandwidth.

T1 bandwidth pricing has come down as companies have gone out of business and the remaining large number of telecommunications companies have begun fighting for a place in an ever smaller market. While many service providers did have room to lose margin, many have come dangerously close to the edge of selling circuits at a loss and many have gone beyond this point. It seems that in the race to the bottom many providers failed to learn the lesson that selling at a loss does not create a long lasting and healthy company no matter how many circuits or widgets you sell. Many companies selling at a loss have already been in bankruptcy and look like they will repeat this exercise as they did not learn from their first go around. So, solvency of the T1 internet service provider should be a consideration when looking at great bargains.


Compare T1 service plans from up to 30 of the nation's premier suppliers of dedicated voice and data services. The process is simple and only takes a few seconds of your time. Simply go to our main page at http://www.amtecdigital.com , fill in a few simple lines of information and instantly receive price quotes from the top providers of dedicated internet services in your local area.

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