Broadband vs Leased Line: Differences Explained

In the days when dial up connections dominated, leased lines became very popular with many companies, since they offered a much better quality of service. While this came at extra cost, it allowed businesses to operate over a guaranteed connection.

Leased Lines

Because leased lines did not go through the Public Switched Telephone Network (PSTN), they weren’t routed through several exchanges and so did not suffer from the same problems as dial up connections, such as connection dropouts and loss of quality.

A leased line was a hard wired connection to the closest company office (CO), so the connection suffered minimal line attenuation, had a good Signal to Noise Ratio (SNR), was always available and always up, and did not require the usual dial in and connect procedure of dial up.

Very importantly, the line was not shared with other subscribers. The entire bandwidth was thus available to the subscribing business. Also, leased lines are by default assigned a static IP address.

Add to this a Service Level Agreement (SLA) that guaranteed a constant line-speed, bandwidth, up-time, with dedicated support, and it became a very attractive alternative for businesses that were dependent on the reliability of their connection.

Broadband Access

At first glance, it would appear that with the advent of broadband access, there would no longer be as great a requirement for leased line connections. However, as we will see, nothing could be further from the truth.

It is a fact that broadband connections have given us far better quality of service than dial up, as well as much greater speeds and always on connectivity.

But is that enough to meet the demands of today’s businesses?

Today, most broadband connections still use the existing PSTN copper wire cabling that is already in place, to connect the subscriber with the Internet Service Provider (ISP), but it does so without having to go through the PSTN.

Instead, the copper wire line connects from the subscriber’s premises, directly to a device called a Digital Subscriber Line Access Multiplexer (DSLAM), ideally located no more than 1000 ft away, in an on-street cabinet.

A very large number of subscriber lines converge in such cabinets, where their data streams are multiplexed together. The resulting feed is then sent over high speed fiber optic cable to the ISP’s data center. There is no routing through telephone exchanges.

For the majority of Internet addicts, this scheme works very nicely, and as discrete users, we are oblivious to the fact that often, the reason our backup is taking so long to complete, is due to momentary traffic congestion occurring on our particular feed.

“Traffic” Congestion

internet traffic congestion

Congestion occurs because the bandwidth is not all ours, we share it with other subscribers. Think of it in terms of driving out our driveway, onto our local, suburban street, and heading for the freeway.

We are free to travel as often as we want and drive at the maximum allowed speed. But as more and more drivers enter, we are forced to slow down, and if there are too many cars, can eventually end up with traffic congestion.

A leased line is like having you own, private road that takes you directly to the freeway.

So while ISPs continue to flaunt impressive connection speeds of 100 or even 300 Mbps, in reality we end up with something a good deal less than that, only to be told these are the theoretical maximum speeds.

But it doesn’t bother us because we can still stream our favorite movies without suffering from buffering, and continue to comfortably play the latest Role Playing Games (RPG).

Congestion and Businesses

Many businesses however, cannot afford to be so compromising, and their needs are far more demanding. After all, their connection must accommodate tens or even hundreds of employees, each vying for a share of their connection’s bandwidth.

Due to the requirements imposed on a leased line connection, instead of using the existing copper wire, a more reliable and efficient fiber optic link is installed from the business premises, making the link to the ISP’s data center all fiber optic.

A fiber optic link suffers minimal losses, and can offer much higher speeds than a copper wire connection, e.g. 1Gbps and higher, speeds that are guaranteed. Furthermore, the link is not shared with other subscribers, making the full bandwidth available.

Even the best VDSL2 connection could not come close to offering the reliability, speeds or bandwidth of a fiber optic link, and that many businesses require.

At this point, it is worth pausing and taking a look at the contrast in the way commercial and domestic subscribers use the Internet.

Compare the average neighborhood with a few users per household, each making relatively light use of the connection, against a business with a large number of employees, simultaneously accessing the Internet, with some making heavy use of the offered speed and bandwidth.

An interesting phenomenon is that as average Internet users, we tend to download far more data than we upload. We receive more email than we send, especially since a lot of that incoming email is spam or junk mail, generated from bad browsing habits.

Business email on the other hand, tends to be job specific, with a close to equal amount of received and sent messages, while sophisticated email server tools monitor and limit the amount of malicious and junk mail going into a user’s inbox.

And while many of us spend hours on end going through the latest gossip sites, subscribing to a plethora of Youtube channels, or listening to hours on end to our favorite music, businesses are busy performing company backups to the cloud.

In short, business users tend to have a more equal balance between the amount of data received and sent.

For this reason, leased line connections are symmetrical, offering the same speeds upstream as downstream. Domestic broadband connections on the other hand, are asymmetrical, and you will sometimes see broadband speeds expressed in terms of downstream / upstream, e.g. 50 Mbps / 5 Mbps.

As we can see, the needs of a business are very different to those of the ordinary Internet user, and in most cases, only a leased line connection can satisfy those needs.


First and foremost to consider when comparing broadband and leased line connections, is that leased lines come with a guaranteed level of service and quality. This is especially important to a business that relies heavily on having a dependable connection.

Connection speed and bandwidth are also guaranteed, and are expressed as delivering a particular bit rate, rather than offering “up to” a theoretical maximum. Furthermore, the bit rate is constant and doesn’t fluctuate depending on line conditions.

Also, leased lines are straight through connections, from the client’s premises to the ISP’s data center. There’s no contention for bandwidth with other subscribers, and so do not suffer from congestion problems during traffic peaks.

Leased line connections come with a dedicated IP, something that is important to many businesses. It allows them to better control public and private network access control and in general, more easily implement stricter security measures.

Leased line connections also scale more easily, as the needs of a business grow, with a large range of high speed, high bandwidth options available.

Fiber optic cable offered on leased line connections, is a far more reliable medium than copper wire offered with most broadband connections. Optic fiber has minimal losses, is not affected by Electromagnetic Interference (EMI), and can support far higher speeds than broadband.

And if on the rare occasion something does go wrong with a leased line, response and support from the provider is immediate, it’s part of the service agreement.

Of course, all this comes at an extra cost, one that most households could not hope to afford. And in many cases, installation is not straightforward or immediate.

Where a wired broadband connection requires a few days to activate, a leased line can take weeks (or even longer) as the subscriber waits for the fiber optic cable to be run.