Leased Line Buyers Guide

Leased Line Buyers Guide

What is a leased line?

A leased line is a private high-performance circuit leased by a common carrier between a customer and a service provider’s network. It is rented on an annual basis and usually carries voice and data or both.
Leased lines are mostly used for either internet access (Internet Leased Line) or used privately between two customer sites (Point to Point Leased Line). Unlike a dial-up connection, a leased line is always active. Similarly unlike broadband, a leased line is not contended or shared and delivers dedicated guaranteed bandwidth straight to the internet backbone. Customers pay a premium for a leased line and it is supported by a comprehensive Service-Level Agreement (SLA) with a guaranteed fix time and a compensation clause. Otherwise referred to as a point to point, private circuit, private line or dedicated access.
Leased lines are often used in site to site connectivity solutions.

[ Related  Compare DSL, Leased Line & Ethernet- Internet Access Buyer's Guide  ]

Leased lines are made up of the following components:

- a router, usually managed by the service provider, is installed into a customer’s comms room. The circuit is presented with an RJ45 connector as standard.

- local loop circuit, usually provided by carrier such as BT, COLT or NTL/Telewest, links the router to the service provider’s local point of presence (POP). Network termination equipment (NTE) is attached to the wall in a comms room and is connected to either a fibre optic or copper local loop circuit. If fibre is already present, the service provider’s installation cost will sometimes be lower. If fibre is not available, copper will be used at a lower cost, with no difference in circuit speed or quality.
- depending upon location, a back haul circuit may be used to link a customer to their service provider’s point of presence and then onto the internet gateway. This will take place behind the scenes and may run over a third party’s national network.
Bandwidth can be tailored to a company's exact requirements, ranging from 64 Kbps to 1000 Mbps. The required speed could depend upon the number of employees accessing the internet or perhaps upon the applications used; some being more bandwidth intensive than others. Once the appropriate speed has been achieved a network administrator might monitor the following:-

- number of users accessing the internet simultaneously at peak times

- the type of services accessed by users i.e. email, voice, hosted CRM, Skype, music downloads etc
the number of hits or visits internal servers receive.

Leased Lines are normally used by businesses that need:
- high quality 24/7 access to the internet with an SLA
- to run mission critical applications
- fast upstream speeds. For example, remote workers accessing office based applications will be pulling away data from their office
- to view real time bandwidth monitoring statistics

Types of leased lines
E1- An E1 is the European & Asian standard for digital transmission over SDH; a dedicated telecommunications connection supporting data rates of 2.048Mbits per second (Mbps). The E1 carries signals at 2 Mbps made up of 32 channels at 64Kbps, with 2 channels reserved for signaling and controlling, known as the IP overhead. The US equivalent in the United States is called a T1 and runs at 1.5Mbps. Providers can divide the connection into different lines for data and voice communication or use the channel for one high speed data circuit. Many service providers allow you to buy just some of these individual channels, known as fractional E1’s

Other types of leased line include:

E3 - E3 is the European equivalent of a T3 in the USA, a long-distance, point-to-point communications circuit service that operates at 34 Mbps. However today it is rarely used in the UK due to its high cost.
T1 - A T1 is the US format for digital transmission is the equivalent of an E1 in Europe. It is a dedicated connection supporting data rates of 1.544Mbits per second. A T-1 line consists of 24 individual channels, each supports 64Kbits per second. Each 64Kbit/second channel can be configured to carry voice or data. Again, many telephone companies and ISP’s allow you to buy just some of these individual channels, known as fractional T1 access

E1 and T1 lines may be interconnected for international use.

DS3 - Supports data rates of 45 Mbps and is based on SDH. They are a popular choice amongst corporate customers for use as an internet access local loop delivery. Today, Ethernet based local loop circuits are becoming increasingly widespread and cost efficient, however, internationally, DS3 tail circuits are still used where Ethernet based tail circuits are scarce.

OC - Optical Carrier is used to specify the speed of fibre optic networks conforming to the SONET standard. A term used in the United States, OC bandwidth speeds begin at OC-1 (51.84 Mbps), OC-3 (155.52 Mbps), OC-12 (622.08 Mbps), OC-24 (1.244 Gbps), OC-48 (2.488 Gbps) and OC-192 (9.952 Gbps)

FRAME RELAY - It is a packet-switching protocol for connecting devices on a Wide Area Network (WAN). Frame Relay networks in the U.S. support data transfer rates at T1 and T3 speeds. In fact, you can think of Frame Relay as a way of utilising existing T1 and T3 lines owned by a service provider. In Europe, Frame Relay speeds vary from 64 Kbps to 2 Mbps. Request Quotes for Frame Relay

ETHERNET EXTENSION SERVICES (EES) CIRCUIT - formerly known by BT in the U.K as LES (LAN Extension Services) or LAN link circuits by COLT) is a point to point circuit available at speeds of 10 Mbps, 100 Mbps and 1000 Mbps. Used originally as a cost effective way to extend a LAN to a nearby building or campus without needing routers. Today many ISP’s use EES tail circuits to deliver low cost internet access over short distances in metropolitan areas. Radial distances are limited to 25km and are charged on a per metre basis. If a customer needs robust, secure high bandwidth connectivity under a 25km distance an Ethernet circuit is a good choice. Upfront charges can be high but may be amortised by ISP’s / carriers. On-going charges are much lower than 2 Mbps or multiple 2 Mbps lines, hence their widespread use today.
Advantages of leased lines
Leased lines have a number of advantages:
- Secure and private - dedicated exclusively to the customer
- Speed – symmetrical, uncontended and direct
- Reliable – private circuit local loops are a premium product supported by fast time to fix guarantees
- Resilience – redundancy and separacy can be incorporated to reduce outages
- Wide choice of speeds – bandwidth on demand, easily upgradeable
- Dependable - leased lines are suitable for in-house office web hosting
Disadvantages of leased lines
- Leased lines can be expensive to install and rent, although 2011 prices are lowest they've been
- Not suitable for single or home workers
- Lead times can be as long as 65 working days
- Distance dependent to nearest POP
- Leased lines have traditionally been the more expensive access option. A Service Level Agreement (SLA) confirms an ISP’s contractual requirement in ensuring the service is maintained. This is often lacking in cheaper alternatives.

Costs of leased lines
The fee for the leased line connection is a fixed monthly, quarterly or annual rate and a set-up (install ) cost. The primary factors affecting the fee are: distance between end points (customer’s distance to nearest POP of service provider), and the speed of the circuit.
Therefore, prices vary between providers and are based on location and type of equipment needed. Customers can expect an internet E1, including local loop, to cost between £300 and £1,300 a month (excluding setup costs), depending on location and speed. Set up costs will depend on whether a customer has fibre already installed. BT sometimes specifies that fibre needs to be registered under a customer’s name. Install prices can vary from £500, if a building has been already popped or lit, to £40,000 depending on circuit size and distance. ISP terms are always subject to a carrier survey and additional costs are applied if the road has to be dug to get into a new premises. Delays can be substantial due to landlord way leaves or if a local council has to close a road.

- The annual rental cost of a standard leased line will include the following: -
- Pre-configured router (optional)
- Static ip addresses – quantity subject to RIPE justification
- POP3 accounts (additional charges apply for extra)
- Domain name hosting (additional charges apply for extra)
- 24 hour network monitoring and fault detection
- Access to experienced technical staff

Selecting a leased line provider

  • First of all decide on which type of leased line best suits your company’s needs. If you are unsure, seek advice from an independent source
  • Next, select 3-5 providers who are qualified to provide the services you require and ask them to quote
    Compare service offerings, pricing, support levels and service level agreements
  • Talk with sales and technical staff. Place a dummy call with the helpdesk to see if they are responsive and you are comfortable with them. This is important as they will be part of your team.
  • Other important criteria: Can you trust your ISP to be around tomorrow? Are they a financially stable ? To make sure you have selected the right service provider, ask the following questions:
  • How long have they been strategically serving companies within your vertical sector and size range
  • What do their clients say about them? (Past & present)
  • Will their technical support meet your needs?
  • How quickly can they provision and change your services?
  • Do they provide a combined single point of contact for account management and sales or do they provide a dedicated service account manager who is targeted to retain business as opposed to doing new business.
  • What back-up options are available? Dual leased line, ADSL, ISDN or dial-up? How is it implemented?
  • How many routers are used? Automatic fail-over? How does the primary service switch back after the fault is corrected?
  • Service guarantees and unlimited customer support via telephone and e-mail
  • Do they proactively or reactively monitor your connection?
  • What is their escalation procedure?
  • How are you alerted? By phone / emailed
  • SLA – What exactly is being offered in the Service Level Guarantee? - Money back or compensation?

Frequently Asked Questions

Q: Can anyone have a leased line?
A: Leased lines work in conjunction with the existing telephone network infrastructure, so offer a very wide geographical coverage. Unlike other connectivity services such as broadband, leased lines are only available in parts of the country that are well served. Companies located in rural areas must assess their upstream bandwidth requirements prior to choosing a location.

Q: What is the lead time for a leased line?
A: Lead time depends on circuit size and local carrier (i.e. BT, NTL/ Telewest). Typically, E1 is 45 working days, EES is 65 working days but delays are common. More importantly, lines of communication between the ISP and customer are critical to ensure that delays are kept to a minimum.

Q: How fast is a leased line?
A: Bandwidth can range from 64kbps through to 10 Gbps. To test your connectivity speed, click here


Q: Is a leased line suitable for heavy bandwidth use?
A: Yes, leased lines are a permanently available internet connection and offer the most resilient method of access. Companies are not competing with other users for the bandwidth and enable businesses to place higher levels of dependence on the internet.
Q: Is there a Service Level Agreement? (SLA)
A: Yes, leased lines are a premium service with stringent uptime guarantees and appropriate rebates for lack of service. The following downtime guarantees are industry standard for unplanned outages.

SLA Maximum number of downtime per month (mins)
99.5% 216 minutes per month downtime
99.9% 43.2 minutes per month downtime
99.99% 4.32 minutes per month downtime
99.999% 0.432 minutes per month downtime

All approved service providers will provide reasonable notice of planned outages / network maintenance that fall outside the SLA
Q: What can I use a leased line for?
A: Leased lines are suitable for various applications. There are no restrictions for leased line use so long as the correct size/speed line will support your business in future. You can use it for internet access, to connect your internal or external server to the internet or to connect offices together via VPN
Q: What size leased line would suit my business?
A: That depends on the number of users and the applications running. The ISP will be able to advise you accordingly
Q: What is the difference between copper and fibre?
A: The difference is that fiber-optics use light pulses to transmit information down fibre lines instead of using electronic pulses to transmit information down copper lines. Today all core networks are based on fibre due to higher speed capacity and greater resistance to electromagnetic noise such as "alien cross talk” from other nearby cabling. In addition, fibre optic cables cost much less to maintain and are a more modern form of data transport. However copper is often used as the last mile to an exchange where fibre is present.

ATM – Asynchronous Transfer Mode is an International Telecommunication Union-Telecommunications Standards Section (ITU-T) standard for cell relay wherein information for multiple service types, such as voice, video, or data, is conveyed in small, fixed-size cells.
CPE – Customer Premise Equipment is the telecommunications equipment owned by an organization and located on its premises. CPE equipment refers to all types of routers, switches PBXs (private branch exchanges), telephones, key systems, facsimile products, modems, voice-processing equipment, and video communications equipment.
ETHERNET - Ethernet is the most widely-installed local area network (LAN) technology. It is a local-area network (LAN) architecture developed by Xerox Corporation in cooperation with DEC and Intel in 1976. Ethernet uses a bus or star topology and supports data transfer rates of 10 Mbps.
FRAME RELAY – It is a packet-switching protocol for connecting devices on a Wide Area Network (WAN). Frame Relay networks in the U.S. support data transfer rates at T1 and T3 speeds. In fact, you can think of Frame Relay as a way of utilising existing T1 and T3 lines owned by a service provider. In Europe, Frame Relay speeds vary from 64 Kbps to 2 Mbps

IP – The Internet Protocol (IP) is the method or protocol by which data is sent from one computer to another on the Internet. It specifies the format of packets, also called datagrams, and the addressing scheme. Most networks combine IP with a higher-level protocol called Transmission Control Protocol (TCP), which establishes a virtual connection between a destination and a source. IP by itself is something like the postal system. It allows you to address a package and drop it in the system, but there is no direct link between you and the recipient.
ISP – Internet Service Provider is a company that provides access to the Internet.
INTERNET BACKBONE – this refers to the public internet.
LAN – Local Area Network is a group of computers and associated devices that share a common communications line or wireless link and typically share the resources of a single processor or server within a small geographic area (for example, within an office building). Usually, the server has applications and data storage that are shared in common by multiple computer users. A local area network may serve as few as two or three users (for example, in a home network) or as many as thousands of users (for example, in an FDDI network).
POP – A Point of Presence is an access point to a service provider’s or a carrier’s network. It might be where they access the Internet and connect to their upstream or backbone provider. It might also be a strategically located aggregation point that serves business hotspots. A Point of Presence is typically rented rackspace within a datacentre or a ‘Telehouse’ used to terminate local loops before backhauling them to their destination.
QUALITY OF SERVICE (QOS) – on the Internet and in other networks, QoS (Quality of Service) is the idea that transmission rates, error rates, and other characteristics can be measured, improved, and, to some extent, guaranteed in advance. QoS is of particular concern for the continuous transmission of high-bandwidth video and multimedia information. Transmitting this kind of content dependably is difficult in public networks using ordinary "best effort" protocols.
ROUTER - A router is a device or, in some cases, software in a computer, that determines the next network point to which a packet should be forwarded toward its destination. The router is connected to at least two networks and decides which way to send each packet based on its current understanding of the state of the networks it is connected to.
SDH – (Synchronous Digital Hierarchy) is a standard technology for synchronous data transmission on optical media. It is the international equivalent of Synchronous Optical Network. Both technologies provide faster and less expensive network interconnection than traditional PDH (Plesiochronous Digital Hierarchy) equipment
SLA – Service Level Agreement is a contract between a network service provider and a customer that specifies, in measurable terms, what services are provided. Many ISPs provide their customers with an SLA
WAN – Wide area network (WAN) is a data network that spans a relatively large geographical area. Typically, a WAN connects two or more disparate local-area networks (LANs)