Internet Connectivity for Laypeople Part 3

consider the cost

This is our last blog of three, dealing with common questions that laypeople have concerning internet connectivity. We covered the different types of internet connectivity and the different types of access methods, all relevant and important topics, but the topic of costs may be the most important, especially where business is concerned. In fact, throughout the previous sections, whenever I mentioned price, it was always in nebulous terminologies; some more concrete detail is warranted.

A simple curiosity of the layperson looking at the modern business landscape is, what am I paying for when I purchase internet? How do internet providers or those who deal with internet connectivity make money?

the loop and port

The local loop and the port are the two components that someone would pay for when purchasing internet for their home or business. The local loop is the last physical connection between your home or business and the ISP (Internet Service Provider) network. Some people refer to this part of the internet circuit as the last mile. The port is the physical connection into the ISP network via a network switch with multiple ports. Nowadays, when you pay for internet you also have to consider the price for the medium (access method) which can be fiber, copper, or coax, and the speed, measured in megabytes.

Generally speaking, the access portion of your internet connection is much more expensive than the fee to connect to the network provider’s access port; if the total monthly recurring charge for an internet connection is $600, the local loop charge will be $400 and the port $200.

the price problem and the move to content

Copper was, and still is, one of the mainstay wires used to connect to an internet provider’s network. However, a growing trend has occurred where copper wires, used in internet connectivity, have become heavily taxed by state and local governments, so the internet providers, in turn, have racked up their prices in hopes of making a profit. Prices on copper lines are so high, that providers are really just hoping that enough of their customers will hop off of them and switch to coax or fiber. This switch over to coax and fiber still doesn’t generate enough profits for internet providers in today’s market.

How internet providers make money has changed much in recent years. The medium and speed that their customers pay monthly fees on, has become cheaper and cheaper to both sell and establish internet connectivity in communities, both rural and urban. Selling the network connections is a race to zero because to be competitive you have to drop the prices.

The solution to this problem is something you may have noticed if you have seen any of the latest internet providers’ advertisements. Take AT&T for example, who no longer cares about the network because the new place to make money is off of the content. AT&T bought Direct TV because of all the media attached to Direct TV’s cable plan. NFL, Netflix, and other channels or streaming services are where most of the money flows in for these companies compared to the $30 people pay monthly for cable and 30 mg of bandwidth.

picking a provider

Now, the consumer must consider which internet provider to partner with. Similar to when deciding between access methods, internet providers are like any other business in that their offerings vary and their prices vary. Ultimately, the decision will be decided based on which provider best fits you or your business’s needs. Comcast, AT&T, Century Link, Spectrum, Masergy?

The Conectrix portfolio has 200 plus options to partner with, all of whom we can provide you with free consultations before you make your decision. Conectrix, in fact, can determine beforehand whether a building you are going to purchase has fiber in it or if the loop is owned by a different carrier than the building.

layman take note

The major take away from this three-part explanation on internet connectivity is that the concepts are easy to grasp once explained, but there are a lot of components to consider once you know. IT experts and consultants are then any business’s go-to when faced with questions concerning internet connectivity. Hopefully, these past three blog posts have given you guidance and will shorten the time you need to devote to establishing your internet and network connection.