I found cheap “Business Internet” in my town!  Will that work for my WISP?

Your local cable or phone company might offer “Business Internet” packages over DSL/Cable/GPON, and they may even provide some rather large ones, say 100mbit down and 10mbit up.   It’s cheap and available in your area, so why not use that for your main gateway?

Technically you could if these were dedicated 100mbit as they would be a great Internet gateway to start out with. Unfortunately, these connections are not dedicated, they are “oversubscribed”.  Oversubscription is part of the key to how broadband works, and how you can get huge amounts of throughput for cheap as a residential or small business consumer.  Providers will never say it is oversubscribed though, and dedicated is often bandied around by telcos as a marketing term when it is not really dedicated at all.

What you really need is a product called “unmetered dedicated ethernet with 95th percentile billing”, that is normally sold by the large business division of an ISP, or by a company that sells exclusively to other ISPs.   See our article on Wholesale Internet Access for more on how to find a provider like this.

Oversubscription Ratios:  Why Dedicated is the Only Option

Broadband works on the same principle as the sewer and water lines in a city.  If everyone flushed their toilet on a street at the same time, it would overload the system!  When utilities are built, the assumption is that only some people will be using them at any given time, so they oversubscribe the system.  Broadband works the same way.   As an ISP, you might buy 50mbit of gateway, and then sell 200 x 5mbit residential connections on that.   Technically, if everyone maxed out their connections, you’d need 1000mbit, which gives you a 20 to 1 “oversubscription ratio”.   You’re banking on the fact that this won’t happen.

Every broadband provider does this, and the oversubscription ratio is generally set depending on the market’s needs (high volume of video streaming equals a lower ratio, and numerous grandmas checking email means a higher ratio).   You’re going to rely heavily on this ratio in order to make a profit.

The challenge with buying “Business Internet” from a cable/DSL/GPON provider is that it has already been oversubscribed.  This means you will be sharing the connection with everyone else on the node, and you can’t be guaranteed the bandwidth, especially at primetime.   By oversubscribing an already shared connection you effectively multiply the ratios together. So if you are doing 20:1 and your provider is doing 20:1, you’re effectively oversubscribing 400:1, delivering very poor service to your customers.

Service Level Agreements (SLAs) and Why You Need One

If you check the paperwork on your “Business Internet” connection, you’ll likely find the words “best effort” somewhere in them.  This means that the company does not have any specific obligation to keep the service up at all times, they’ll just do their best to make that happen.

For most businesses, that’s alright as a 6 hours outage after office hours won’t be that big of a deal and they can just rely on a backup, or wait until the service returns if they need to.   In these cases, you may not even be able to reach your ISP, either because you’ll be waiting on hold for hours, or because they are closed outside of office hours.

As an ISP, your Internet gateway is everything.  If it goes down, every single one of your customers will be calling your support line asking when it’s coming back online.  Too many outages, and your service will be deemed unreliable.  Customers will flock to other providers.

A “Service Level Agreement” is a contract with your provider to ensure you are getting a certain level of uptime, for example, 99.99%.   If they fail to deliver this, the contract will specify that you will receive a large refund on your monthly service fee, which keeps them on their toes to make sure that things stay online.   It will also ensure you have 24/7 access to an emergency number for outages.  All carrier-grade dedicated fiber providers will have SLAs.

Other Dangers of Non-Dedicated Gateways

Oversubscribed connections are sold based on a maximum speed.  What this means is that you will never receive faster speeds than the maximum, the actual speed you get is not specified and will vary.  So if you’re buying a “100mbit Business Internet” package, you may only be getting 20mbit at prime-time, which will cause you a lot of trouble if you’re trying to sell a 50mbit service to any of your customers.

Reselling a non-dedicated connection also could result in a breach of their terms of service.  If the provider finds out they may simply disconnect you with no warning or recourse, leaving you and your clients without service and no backup in place.  This has spelled the end of some startup ISPs.

Bonding Makes Everything Worse – Don’t Do It!

A quick and cheap fix that startups have been tempted to try is to take a number of residential or business grade cable modem services in the nearby city or town, bond them together and add up all the connections.  Taking four 50mbit home cable packages and combining them sounds reasonable, 50 times 4 is 200!

Unfortunately, in addition to all the problems of oversubscribed connections listed above, bonding multiple consumer grade connections together only compounds the issue.  Imagine this as hooking up a splitter to your garden hose so that you have ten sprinklers.  It’ll work, but each one will only get 1/10th of the flow rate.   Broadband is the same – all of your cable modems will be on the same node, so they will only make each other slower!

Dedicated Gateway Isn’t Always Expensive

The biggest reason that WISPs find themselves relying on cable modems or other improper gateway options is that fiber access is either too expensive, or not available where they are.   Our next post will discuss  ways of finding these providers, some surprisingly cheap options for wholesale internet, and some clever ways to bring the service to your market.

Having a great upstream provider is the first step in being a great Internet provider in your market, so it’s worth the extra attention and legwork to get it set up from the start!