It’s easy to assume all high-speed internet connections are equal, but this isn’t true. Unfortunately, businesses may only discover this reality after missing out on sales and losing valuable customers.

While the core of the internet is quite reliable, with issues like packet loss, latency, and bandwidth rarely impacting crucial applications, the most significant difference between internet services lies in the “last mile” connection – the link between your router and the provider.

Broadband connections fall into two main types: shared and dedicated. DSL and cable broadband are common examples of shared connections, while T1, DS3, and Ethernet business services offer dedicated connections. The term “business” is key here. Shared internet services were initially designed to make broadband affordable for homes and home offices. In contrast, medium to larger businesses have always relied on dedicated connections for their voice and data circuits. However, smaller businesses, such as quick-service restaurants, sales offices, and owner-operated stores, might be tempted by shared connections marketed as business versions of consumer-grade internet.

Looking at the bigger picture, the entire internet relies on shared bandwidth. So, what’s the difference between a shared and dedicated connection? The key difference is “oversubscription.” Think of it like airlines overbooking flights. They do this because not everyone who books a ticket will show up. Similarly, internet service providers sell more capacity than available, assuming not all users will need the maximum bandwidth simultaneously. This works fine until everyone tries to use the service at the same time.

Imagine your ISP has a 155 Mbps fiber optic connection (OC3) shared by 100 customers. With dedicated access, each customer would get 1.5 Mbps, ensuring the OC3 connection isn’t overloaded even if everyone uses their maximum speed. However, ISPs often offer “up to” 10 Mbps to each customer. This works well if only a few users utilize their full bandwidth. However, if all 100 users try to download a video simultaneously, each user’s speed will plummet to 1.55 Mbps as they share the limited 155 Mbps.

This explains why your internet speed can fluctuate. It often slows down during peak hours when many users are online, consuming significant bandwidth. To make matters worse, some ISPs might share the OC3 connection with 1,000 users, potentially reducing your share to a measly 150 Kbps during high-demand periods. Remember, the advertised speed is “up to” 10 Mbps, not a guaranteed speed at all times.

As your connection speed decreases, downloads take longer, and some applications may become sluggish. VoIP calls and video-based applications, like video conferencing, are susceptible to bandwidth congestion. Shared bandwidth services are typically offered on a “best-effort” basis, meaning there’s no guarantee of consistent speed, minimal packet loss, low latency, or even constant availability.

With a dedicated connection, your bandwidth is reserved and always available. This can be crucial for streaming audio or video. Even large grocery stores or retailers processing numerous credit card transactions require consistently available bandwidth. In essence, any business reliant on online access for presentations, inventory management, or order processing needs a stable, dedicated internet connection.

Dedicated internet bandwidth and secure, private connections are more affordable than ever. Don’t settle for a limited service that seems cheap initially. Compare the costs of dedicated bandwidth for businesses before making a decision.