Your Internet connection is something your business depends on. But for many small businesses with financial constraints, choosing the lowest-cost solution tends to be the way to go. Before you sign the contract, however, it’s important to have a complete understanding of how the different options can affect your bottom line. In particular, you need to understand the differences between cable and fiber Internet – and both the direct and indirect cost savings of each – before making a decision.
What’s the Difference between Fiber and Cable Internet?
Cable Internet is a broadband Internet connection that operates over cable TV lines, the same lines that bring you your cable television. By using TV channel space for data transmission – certain channels are used for downstream transmission and other channels for upstream transmission – you get access to broadband Internet.
You can get cable Internet as a standalone service, but it’s often cheaper if bundled with telephone and TV services. You typically have a choice of speeds, from 1 Mbps to 10 Mbps, or sometimes 25 Mbps or even higher. A technician comes to your office and sets up a modem that sits between the cable outlet and your computer.
Sometimes you lease the modem from the cable company, and sometimes you buy it. Either way, you usually pay an upfront cost for installation followed by a monthly fee. Typically, the more services that are bundled, and the longer you commit to, the less expensive the technology services involved will be. For example, it’s cheaper to sign a 12- or 24-month contract than to go from month to month. On average, a cable Internet connection in the United States costs about $50 per month. But the actual cost for you can vary significantly upon your location, the speed you choose and your cable provider.
A fiber Internet connection can be a little more complicated. The installation process is slightly longer because, unlike cable Internet that operates on your business’ existing cable line, fiber Internet requires a new fiber-optic cable to be connected to your premises. Some buildings are not wired for fiber, which can make the installation expensive. However, some fiber Internet providers have been investing in expanding their networks to more locations in more cities so the cost of connecting doesn’t fall on the shoulders of business owners. You will have to check your particular geographic area and building to see if you are “fiber-ready” or not.
In general, fiber technology is superior to traditional Internet technologies. As thin as a human hair, the strands of optically pure glass in the fiber cable can carry both data and voice at lightning-fast speeds. How fast is that? In some areas, the speeds can reach as high as an astonishing 1 Gbps, which allows you to download a large video file almost instantly – in just seconds, rather than the multiple minutes it would take with a cable Internet connection.
Of course, the speed associated with fiber does come at a higher price. Depending on your location, the speed you choose and the provider, it can cost anywhere from $70 to more than $300 per month. The installation fees for fiber tend to be higher too, depending on your particular office location and if your office has adequate wiring to support fiber speeds.
The Price Is Not the True Cost
When choosing an Internet option, it is crucial that price is not the only thing you consider. There are direct and indirect benefits offered by both cable and fiber. Cable is, without a doubt, the option that will be the lowest cost. Period. If cash flow is an issue for you, then you should probably go with cable.
But you should also consider the indirect benefits you can derive from fiber. Although it is more costly – both to install and on an ongoing basis – it can sometimes offer a higher return on investment (ROI).
- Employee productivity. Because fiber is one of the fastest Internet platforms available, you can transfer large amounts of data very quickly. This speed can result in increased employee productivity and faster response times. For example, instead of waiting minutes for a large file to upload, your employees can instantly send it with a tap of a key, and move on to other tasks. Over time, these minutes add up.
- Reliability: Fiber isn’t adversely affected by weather, moisture, and temperature and can lower the risk of downtime to your all-important business network. In 2015, businesses reported their networks went down an average of five times each month. The annual cost of this downtime? A cool $1 million. This number includes lost employee productivity (78%) and lost revenue (17%) because transactions couldn’t be processed and customers couldn’t connect. When you look at those kinds of numbers, it’s a no-brainer to consider fiber to prevent such downtime.
- Consistency. The speed of fiber is dependably consistent. With the speed of fiber, your users won’t be frustrated by a slow Internet due to too many subscribers surfing, streaming, or downloading, or due to electromagnetic disturbance by other machines, cables or even the sun.
- Security. Fiber used to be considered significantly more secure than cable, because hackers couldn’t tap fiber to pick up electronic signals the way they could with cable. But since hackers evolve their tactics, there have been instances where fiber cables have been intercepted as well. With fiber, if your cables have been tampered with, you will immediately know because you will lose your Internet connection.
- Scalability. Fiber scales to handle all the services you might want to throw at it (like Ethernet). Compared to cable speeds, it has enough bandwidth to separate real-time applications like voice and video to ensure you don’t lose parts of a conversation or receive buffer messages for video.
In short, yes, you can save money – sometimes considerable amounts of it – by sticking to cable. As a small business that is monitoring budget, cable might be the most logical choice. Otherwise, if you’re thinking longer-term, fiber just might offer you a higher ROI, despite the higher cost.