A leased line is billed on a monthly basis
regardless of its level of utilization. In comparison, a switched network
service, such as the use of the switched telephone network, is billed on a
usage basis.
To illustrate an example of the manner by
which you would compare the usage of the switched network with the use of a
leased line, let’s assume you are investigating an application that is
estimated to require two hours of communications per day.
Let’s further assume there are 22 business
days in the month, your long distance communications carrier’s rate plan
permits calls to be made any time during the day for 10 cents per minute, and a
leased line used to connect the two locations would have a monthly cost of
$300.
Because our estimate involves two hours of
communications per business day and there are 22 business days per month, this
results in 44 hours of communications per month. Based upon the use of a flat
rate dialing plan that charges 10 cents per minute, the cost of using the
switched network becomes:
44 hours/month X 60 min/hr X 10¢/min =
$264.00/month
If we compare the cost of anticipated
switched network usage to the cost of a leased line, it is apparent that the
cost of the switched network is more economical. However, what happens if we
expect daily usage to increase to three hours per day?
Based upon communicating three hours per
day, the total usage of the switched network becomes 3 hours/day X 22
days/month, or 66 hours per month. Continuing our use of a flat rate calling
plan of 10¢/min, the monthly cost of the switched network becomes:
66 hours/month X 60 min/hr X 10¢/min =
$396.00/month
Note that the cost of using the switched
network now exceeds the cost of a leased line. The preceding computations
illustrate several key communications concepts. First, as usage of the switched
network increases, it is possible to reach a point where the monthly cost of a
leased line is more economical.
Secondly, because the monthly cost of a leased
line is fixed regardless of usage, many times a decision to install a leased
line should be made even when it appears that the cost of using the switched
network may be more economical. This is because if we are slightly wrong in our
estimate of switched network usage, a leased line could be more economical and
its expense is fixed, making its cost easier for budgeting purposes.
In addition, if estimated usage is on the
low side but the cost of using the switched network and a leased line are
within close proximity of one another, we should probably select the usage of a
leased line. This is because its use caps our communications cost.
To illustrate the use of rate tables, let’s
examine a second comparison of the use of the PSTN versus a leased line. For
this example, assume that a personal computer located 50 miles from a mainframe
has a requirement to communicate between 8 a.m. and 5 p.m. with the mainframe
once each business day for a period of 30 minutes.
Suppose the communications application
lengthened in duration to 2 hours per day. Then, from Table 4.1, the cost per
call would become 0:31 X1รพ 0:19 X 119 or $22.92. Again assuming 22 working days
per month, the monthly PSTN charge would increase to $504.24, making the leased
line more economical.
If data communications requirements to a
computer involve occasional random contact from a number of terminals at
different locations and each call is of short duration, dial-up service is thus
normally employed. If a large amount of transmission occurs between a computer
and a few terminals, leased lines are usually installed between the terminal
and the computer.
Since an analog leased line is fixed as to
its routing, it can be conditioned to obtain a uniform level of attenuation and
delay distortion, as well as provide a minimum signal-to-noise ratio which will
reduce errors in transmission.
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