Fractional T1 Line Prices

By: T1 Shopper  09-12-2011
Keywords: service providers

Fractional vs. Full T1 Prices

There isn't much of a cost difference between a fractional T1 and a full (1.5 Mbps) T1.   Why?  Well, so we can better understand, let's start by taking a peak at the specific costs of delivering T1 service.

The fractional T1 service providers have two costs associated with your T1 - the "local loop" and the
"port".  The local phone company provides and installs the local loop.  The T1 provider supplies the "port" which is connection between the local loop and the Internet (or PSTN if you're using phone service with your T1).

The cost of your local loop is the same - irregardless if it's a full T1 or fractional T1 loop because the local phone company always sets the local loop a 1.54 Mbps. Why?  Because it takes the same amount of copper wires and other equipment to run a fractional T1 as it does a full T1.  The local phone company views all T1 users as "full T1" users no matter if they are full, or fractional T1's.  And of course, the local phone company charges your T1 provider the same cost as well!  Since there are no cost savings for the T1 provider or the local phone company on a local loop, the end user customer doesn't get any cost cutting here either.

The cost of the port has two parts - the equipment and the bandwidth charges.  The equipment is just like the local loop.  The amount of time required to install and maintain the fractional T1 port equipment is the same as required for a full T1 port.  No cost savings on equipment.

Finally we get to the cost savings - the bandwidth charges.  For the T1 provider, bandwidth charges make up probably about 10% of the total cost of providing a T1.  Surprisingly most of the expense in providing T1 services is in getting them installed, paying the local phone company for the local loops, and the ongoing support, billing and other day-to-day maintenance expenses. 

Keywords: service providers

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There are no authoritative publications technically defining the two terms although it may be acknowledged that a "DS-3" refers to the format of transmission and "T3" refers to the type of connection and the facility used in transmitting the signal. T3 and DS3 are used interchangeably.