DS3 Prices and Fractional T3
Like most telecommunications services DS3 (or T3) prices have been falling for the last couple of years. This partially a result of the fact that competition has been heightened since deregulation in 1996. The number of companies offering service has increased dramatically. With more competition in the marketplace service providers have to reduce their prices to attract customer and keep them from going to competitors. Service providers are desperate to keep margins but even more desperate to keep adding customers.
Two other factors that have contributed to the reduction in DS3 price are the soft economy and crash of the stock market. Since the peak of the market in 1999 many companies have gone out of business and no longer require service. This means there is a smaller pie available and there are plenty of telecom providers trying to get their share. Once again, the buyer is in control and can shop until he or she finds the price that is right for them. One other reason for the reduction in DS3 pricing is the fact that equipment costs and the cost of supplying the bandwidth have decreased. This means that companies can supply the bandwidth at a lower cost.
As bandwidth usage continues to increase as a result of bandwidth hungry applications like video on demand and graphic heavy applications the price of bandwidth will continue to drop. Additionally, if a full T1 is not in your budget, you should look into purchasing a fractional T1 or T3 line. Why not get all the advantages of T1? For several people the biggest factor in their decision is reliability. If reliability is critical to the applications you run over your connection, you should consider replacing your DSL connection with a fractional T1. DSL is a quick and cost effective method of acquiring high speed bandwidth however it is not intended to support commercial applications or large numbers of users as are T1 connections.
Even though you will not have a full T1 line, you will be paying quite a bit more than you did for your DSL connection. This is due to the structure of T1 pricing. A T1 connections is established by providing a wire from the users premises to the CO where the service provider has equipment. Part of the cost of a T1 is the "loop charge" or the monthly rental fee for the wire that is rented from the local phone company. Once the connection reaches the CO it can access the carriers network and reach any destination. This loop will be paid in full whether you use a fraction of the available bandwidth or the full 1.5Mbps and therefore your price for a 768Kbps fractional T1 connection will never be half the price of a 1.5mbps full T1 connection. Although the price reduction is not what you might expect it to be, this may put a T1 in your budget and be a great way to get dedicated service into your building.
