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Getting Connected

October 1, 2002

10 Min Read
Getting Connected

EVEN THOUGH THE TITLE OF THIS ARTICLE SEEMS STRAIGHTFORWARD, there is more than enough information under the topic of communication technology to fill a university-level computer-science course. My guess would be few of us have the time or inclination to sit through a boring dissertation on what actually amounts to multiple subject areas. So how does the average, non-technical businessperson get a true perspective on choosing communications connectivity? And where do we get started in understanding the basics of communications?

A good first step is to look at some of the technology trends driving the communications revolution, then detail a few of the current offerings and their capabilities. A reasonable third step would be an attempt to dispel the the marketing hype surrounding the possible options, differentiators and costs between the competing technologies.

Analog vs. Digital

While the technology behind data communications may be fairly complex, the forces causing the business community to push for improvements in this area are very simple. It is significant that in the five years since the arrival of the (then unparalleled and only theoretical) 56K dialup modem, enough other technologies have appeared on the radar screen that most businesses scoff at the idea of using one. Businesses are moving more data as part of their daily routine and require ever increasing transmission speeds. This revolution has been accompanied by a reduction in the price of communication services, resulting in a "more speed for less money" mentality.

What are the main options you have when ordering data-communications services? Before getting to the list, it's important to understand the difference between analog and digital. We are all familiar with the original analog service: the plain old telephone system. Many of the commonly used tools for communicating between two locations, such as modem (non-wireless models) and facsimile, are based on analog technology and operate via the phone system.

Analog signals, while plenty reliable for voice communications, have some significant drawbacks when it comes to moving data. As an analog signal is transmitted over long distances, it has a tendency to weaken in strength--a characteristic known as attenuation--and pick up noise, such as the static you hear in telephone calls. There is no way to rebuild the signal, but it is possible to boost it. The problem with boosting the signal is you also increase the noise level, thus degrading the overall quality of the transmission over longer distances.

On the other hand, a digital signal can actually be rebuilt and the noise dropped out, producing a stronger, clearer duplicate than can be achieved with analog transmissions. The move from analog to digital signaling has provided cleaner transmissions and improved error-checking capabilities. As a result of the improved connectivity, digital technologies allow telecommunications networks to carry multiple types of communications on the same circuit (data, voice and video) while lowering the error rates on transmissions.

Connectivity Options

Now we'll move on to your connection options. I am intentionally staying away from discussing any third- or fourth-generation wireless products, since the industry and standards are in a state of flux and anything discussed today will undoubtedly be outdated tomorrow. The five main contenders for your communications dollars are: the analog dialup modem, the integrated services digital network (ISDN), the digital subscriber line (DSL), the digital cable modem and the digital two-way satellite system.

So what are the differences between the contenders in our list? Do the offerings really achieve the speeds splashed across the endless advertisements we see? What are the expected reliability/dependability parameters? What is the cost vs. performance, or what do you really get for the money? Before attempting to draw the bottom line on the contending options, let's look at their general characteristics, connectivity speeds and costs.

The Modem

The modem (MOdulator/DEModulator) is a device that converts the digital signal from your PC into the appropriate frequency to send over the analog telephone lines. The top advertised speed for a dialup modem is 56,000 bits per second, or 56K bps, which places the modem at the slowest transmission rate of the five offerings. A note of caution: You will often hear the terms "cable modem" and "DSL modem." While the nomenclature can be confusing, these modems do not function the same way a dialup modem does.

There are several notes of caution when dealing with modems. First, the connection is determined by the lowest common denominator, meaning your connection speed may very well be dictated by a slower-speed modem on the receiving end. Modem connectivity is known to be noisy due to attenuation and other traffic. It is also unreliable to some degree in first-time connection rate and holding open a connection for extended periods of time. Each time a transmission period is over, the modem disconnects from the network or Internet service provider (ISP). This means each time a new session needs to be established, the modem has to reconnect, which can take up to several minutes.

On the upside, once you have established an ISP account, you can connect to the Internet from any hotel, airport, etc., by simply using your laptop over a commercial telephone line. Modems are also inexpensive, roughly $30 to $50, and are usually provided as a bundled component on any new PC or laptop purchase. Services provided by a local ISP will run approximately $20 per month.

Integrated Services Digital Network

An ISDN is a WAN-oriented (wide-area network), data-communication service provided by telephone companies. ISDN is unique among WAN services in that it has two separate lines/channels that can be combined to send data only, or data and voice separately. Each of the ISDN channels provides a digital 64K connection that can be joined so data can be sent and received at a maximum of 128K bps.

One-time ISDN hardware and installation charges run in the vicinity of $300, but the monthly charges are usually steep. It is not uncommon for ISDN use to cost at least $110 per month. On the subject of charges, be very careful when ordering ISDN. Many of the service providers will advertise 20 to 30 hours of connectivity per month and charge an additional 2 cents or more per minute above those base hours. The quoted monthly charges are also exclusive of any long-distance charges that may apply, so it is important your ISP be qualified as a local call. If you operate an office or facility that needs constant connectivity or the call to your ISP is long-distance, you will definitely suffer sticker shock when your first monthly bill arrives. If you think your usage will be above the bundled price levels, request a quote for a flat-rate charge that includes unlimited connection time. Also ask if ISP services are included in the price or whether you must obtain these separately.

Digital Subscriber Line

DSL technology provides a dedicated digital circuit between a business or residence and the telephone company's central office, allowing high-speed data transmission over existing telephone lines. DSL modems attached to the telephone lines usually transmit from 256K bps to 8M bps to the customer, and from 512K bps to 1M bps back to the phone company's main switch, depending on the customer's distance from the central office. Most DSL users connect at speeds of less than 1.5M bps.

There are strict distance limitations on DSL service, with an invisible boundary at about 18,000 feet from the central office. This distance limitation is not "as the crow flies," but as the cables are snaked under/over the streets, thus changing the straight-line distance to the phone company drastically.

There are also many flavors of DSL available on the market--ADSL, IDSL, SDSL, etc.--so question your sales representative closely about the capabilities of his service offerings. DSL is very affordable, with one-time install and hardware costs usually around $400; but most providers will waive some or all of that cost for new subscribers. The monthly connection and ISP fees should fall in the $50-to-$60 range. While there are numerous horror stories circulating on DSL install lag times and service quality, it seems the service providers are getting much better at placing the equipment in a timely manner and keeping the service up and running.

Digital Cable Modem

The digital cable modem is a device that attaches between your PC and an analog cable-TV system. The cable modem changes the digital signal from the computer to an analog signal for the cable TV, much the same as any other modem. This device allows cable companies to provide data-transmission capabilities to customers over their existing infrastructure (cable under the streets).

Cable modems are very fast when compared to the other competitors, transferring data at a rate of 1.5M bps. For sheer Internet surfing power, it's not a bad way to go. Currently, there are more digital-cable subscribers than DSL customers. One-time hardware and installation costs will run approximately $200, and monthly service charges will be in the $50 range.

There is a possible drawback involved with the use of a cable modem, since it is a shared resource. Everyone taking advantage of digital cable within a neighborhood loop could possibly compete for the same finite bandwidth. Of course, digital-cable service is only available in areas that already provide digital cable TV. One last hitch is although a community may have digital cable-TV service, there is no guarantee the service provider has enabled the system to carry cable-modem signals.

Two-Way Satellite

The last option on the list is two-way satellite service. Brought to you by the same folks that provide satellite television, this relatively new offering's greatest selling point is there are no distance limitations, no cable runs necessary, and no mass, neighborhood-rollout requirements. What you basically need is an unobstructed view of the southern sky (for you folks in the northern hemisphere).

The drawback is those satellites are more than 22,000 miles above the earth, and electronic signals do have a speed limit imposed by physics. So what, you ask? The signal takes a long time to get from you to an ISP to the distant end and then make its trip back (a long time in the realm of light speed, anyway). This lag is known as latency, and comparing the approximate 900-millisecond roundtrip via satellite to the 25- to 50-millisecond roundtrip via DSL or cable modem is like traveling cross-country in a Conestoga wagon vs. an airplane. Also, acts of nature, such as heavy rains and snowfall, have a tendency to block the signal altogether; but if you don't qualify for DSL or cable service, the satellite may be the only game in town. The major competitors in this service--Hughes' DirecWay being the largest--provide hardware and installation for about $600 and monthly service for approximately $70.





Installation/Hardware Cost

Monthly Charges Per Month

Monthly Charges 24 Months

Monthly Charges 36 Months


56K bps







768K bps







1.5M bps







128K bps






Satellite (DirecWay)







Notes: DirecWay speed is estimated. No hard figures are available at the website or in any of the company's literature.

Estimated per-month charges for 24 months = monthly charges X 24 months + hardware and install costs / by 24.

Estimated per-month charges for 36 months = monthly charges X 36 months + hardware and install costs / by 36.

ISDN charges include line and ISP charges for unlimited use.

These are several of the common options you have for data connectivity from your business or home to the outside world. Which solution is best? There is no good answer to that question, since so much depends on region, availability, cost and personal preference. The way to determine the solution for you is to get feedback from local people using the various options. Calculate how much connection time you require and make a realistic estimation of how much speed you need to work effectively.

Bill Hoban is the chief executive officer of Centershift Inc. Centershift, based in Salt Lake City, is a provider of hosted application and online rental-management services for the self-storage and other lease-based industries. For more information, call 800.9CHIFT; e-mail [email protected]; visit www.centershift.com.

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