Broadband for business: varied needs, many providers

Updated, Sept. 2, 2011: Added clarification and fixed typos.
Consumers hear a lot more about competition for residential services, but Internet service providers are equally focused on the fight for the business market in Philadelphia.
While residential customers generally get one-size-fits-all service from ISPs, business customers have wide array of needs and many companies to choose from.
“Probably one of the most competitive parts of the industry is services for businesses, it’s very profitable for different companies,” says Lee Gierczynski, Verizon spokesman.
Residential ISPs are successful because of their wide availability. Verizon and Comcast are forced to cast a wide net across the entire city, in part because they are legally required to do so, and in part because it’s the only way to make such a network profitable.
In the commercial sector, ISPs only have to respond to market forces. In Philadelphia the market includes everything from small one-user firms to large universities providing service for thousands. All of them have a variety of needs for bandwidth, but they all need service that is reliable and within their budget. All of them face a variety of interesting issues with getting service in Philadelphia.

Small Business Services

Representatives from Comcast say the majority of its business customers use the company’s cable Internet service. Though cable Internet still enters the building through normal coaxial cable, in the last decade Comcast has replaced most of the backbone of its network with fiber optic cable. Just like for residential customers, cable Internet services are scalable up to 100 mbps downloading, and about 10 mbps uploading.
Recently Comcast has entered into the market of customers who need more bandwidth than their cable Internet services can provide. Last year the company rolled out Ethernet Dedicated Internet, in which companies with large bandwidth needs can connect directly to Comcast’s fiber backbone.
Ethernet Dedicated Internet can provide bandwidth ranging from 10 mbps up to 10 gbps. Because the connection is fiber, those figures are symmetrical for uploading and downloading.
Pricing is determined by bandwidth, location, cost of buildout and the term of contract. Comcast requires customers to commit to 2-, 3- or 5-year terms.
“Marketing and awareness [of EDI] are in the early stages so it’s safe to say the majority of our clients are still using the coaxial product,” Comcast spokesman Jeff Alexander said in an email.
“As we continue to build out the fiber network, that’ll just offer another affordable option for small business customers,” spokesman Lee Gierczynski says.

A Case Example in Old City

Located among a mix of historic 18th century landmarks and bustling night clubs in Old City, Independents Hall is an office and ISP for telecommuting professionals in the city. On a normal day, between 30 and 50 members are using the coworking space’s Internet connection. For Internet service, the company uses basically the same cable Internet available to residents all over the city. As far as bandwidth, Indy Hall accommodates all its users with 25-30 mbps download/6 mbps upload DOCSIS 3.0 from Comcast. That costs the facility $90 per month, co-founder Alex Hillman says.

People who come to our office expect a couple things, at the top of the list is reliable Internet.

But Hillman says the primary problem with Comcast for business service is not speed, rather, it’s reliability. While he says service has improved when he puts pressure on the company, as of late, Indy Hall had been experiencing multi-hour outages once every two weeks, cutting into productivity for workers, and Indy Hall’s reliability as a workspace.

“It’s been a really big challenge this summer,” Hillman said of the outages. “People who come to our office expect a couple things, at the top of the list is reliable Internet.”
Not only does the problem affect Indy Hall, but the neighborhood as a whole. A number of other small tech firms have set up shop in Old City, and a lack of reliability could hamstring the small tech corridor before it gets off the ground. “There’s a density of businesses who rely on this technology. If we want to keep attracting businesses to this neighborhood, we need to be able to say the Internet is ‘super reliable’ and it’s misrepresentative right now,” Hillman says.

The Corporate Provider

Cogent Communications serves companies all over the world with a massive fiber network. About half of its revenue comes from large customers like Temple who can afford a direct connection from their fiber backbone to a proprietary network. But the ISP has also put a significant investment into providing broadband over a fiber network serving only high-end office buildings in Center City. Those customers can get 100 mbps of symmetrical service, typically at a cost of $700 per month, according to Cogent CEO David Schaeffer.
Customers can get 100 mbps of symmetrical service, typically at a cost of $700 per month. Cogent targets large office towers like Liberty Place and Center Square. While they’re consistently expanding the network, prospective buildings are usually about 41 stories in height and serve at least 51 businesses, Schaeffer said.
“[Verizon and Comcast] are building Internet on top of a network for a product that is typically available on a broader footprint, we fully admit that our footprint is limited,” Schaeffer said.
“[Verizon and Comcast] are building Internet on top of a network for a product that is typically available on a broader footprint designed for legacy services such as voice and cable television. Cogent built its network with the sole purpose of delivering data. Cogent’s network footprint is somewhat limited due to its targeted approach to serve the largest buildings in the city as well as carrier hotels. we fully admit that our footprint is limited,” Schaeffer said. [Editor’s note: A Cogent representative emailed clarification to this statement on 9/1: “Cogent built its network with the sole purpose of delivering data. Cogent’s network footprint is somewhat limited due to its targeted approach to serve the largest buildings in the city as well as carrier hotels.”]
In order to guarantee reliability for its customers, Cogent provides an interesting guarantee. For every hour of impaired service, the company gives a user credit for 24 hours of free service. Cogent says its greatest concern doing business in Philadelphia is the permitting process before laying fiber, because the company says its more exhaustive than other metropolitan areas.

The Institution

While its bandwidth needs are vastly different from a small tech firm, Temple University is concerned with the same reliability issues as Indy Hall, the university’s Chief Technology Officer, Timothy O’Rourke, says.
“You become so reliant on your network and your Internet access that you can’t rely on just a single point of failure,” O’Rourke says.
The university’s own fiber network, which serves an estimated 60,000 users, is built so that any network outage is limited to just one floor of a building on its campus. The university takes the same attitude towards its broadband connection by dealing with two separate companies, both of which can accomodate all its data needs at once. For more than 10 years, Temple has relied on bandwidth from Verizon’s fiber backbone.
But more recently, they struck a deal with Cogent Communications, a provider geared solely toward business customers, to cover its data needs in case of an outage from Verizon.
“We decided we could not live with one provider,” O’Rourke said. “They’ve both been very reliable, both can handle our whole network.”
Overall, O’Rourke says it takes 2.8 gbps of service to cover the university’s 60,000 users — 40,000 students and 7,000 employees at Main Campus, plus the University Hospital north of campus.

The Data Center

Razor Servers provides a local base of operations for companies from around the world that need a data presence in the Northeastern United States. They also provide data storage for local companies who don’t want to worry about physically housing all of their servers in their offices.
Seventy percent of Razor’s business is dedicated hosting for companies around the world, Dave Drager, VP of Tech Development for Razor, says.
Because of the intense data needs of their users, data centers have to be connected via fiber. Razor servers has fiber entrance paths from basically every ISP imaginable. Like any other user, they have to pay for bandwidth, but because of their hosting business, there is much more emphasis on their uploading than downloading.