Wholesale Internet 101
FAQs to Explain It All
When someone says “I got it wholesale,” they’re bragging about getting a great deal and not paying the “retail” price. There’s a wholesale market for just about anything, from refrigerators to fur coats. And, in fact, the wholesale internet is a huge market – but it’s not just for anyone.
Q1 – What is the wholesale internet?
The wholesale internet is an integral part of the telecommunication and cable industries. When it comes to fiber-optic, cable and telecommunication networks, companies are able to buy market access, bandwidth, functionality and servicing on a wholesale basis with the intent of reselling their purchased “capacity” on the retail market to businesses and consumers.
Q2 – Can anyone engage in the wholesale market?
In theory, yes. But it would rarely be practical for an average business to try to purchase internet capacity or services through the wholesale market.
Most wholesale purchases are made by telecommunication and cable companies themselves – or by government agencies, educational institutions and media outlets.
If you were going to start a business as an internet service provider, data processing facility or media outlet, you might eventually look to purchase wholesale internet access through the wholesale market. Otherwise, your business needs would be more easily met purchasing on the retail market from telecommunication and cable companies.
Q3 – Why do telecommunication or cable companies need to purchase anything?
Telecommunication and cable companies frequently engage in wholesale internet transactions with each other in order to become an ISP (wholesale) and serve their business customers from market to market. Telecommunication and cable companies have franchise areas – and none of these franchise areas are truly national.
In one scenario, a telecommunication company serving Atlanta, for example, might have a local business client with an office in Fargo. To provide a voice, video and data for that business client, the telecommunication company would purchase – wholesale – access and bandwidth from the firm owning the Fargo area franchise.
In this way, they’re able to deliver a continuous link between the client’s offices, securing the client’s internet connection and local area network (LAN).
In another scenario, either telecommunication or cable companies could be in the same market. Purchasing capacity on the wholesale market is sometimes done in this scenario because it’s cheaper easier and quicker to buy wholesale than to build more fiber-optic, coaxial or DSL lines.
Q4 – What specifically do they buy?
- Dedicated Internet Access (DIA). With dedicated internet access, a specified amount of bandwidth gets carved out and dedicated to the purchaser. While this can be done with fiber, cable, DSL or wireless connections, this is most often done with fiber.
- Carrier Ethernet. With wholesale carrier services, Ethernet represents as much a business solution as a capacity. Offered by cable companies, carrier Ethernet provides a low-cost, easy-to-implement approach for providing broadband internet connections and secure local area networks for businesses.
- Tower Backhaul. Connecting microwave or cellular towers by utilizing fiber-optic Ethernet backhaul. This can be done with existing fiber-optic cable or by running new cable between macro and micro towers. Wireless companies are finding this offering for high-speed internet. Wholesale prices help them keep up with the demands of mobile traffic and next-generation mobile devices.
- Dark Fiber. Unused or “unlit” fiber-optic cable is called dark fiber. It represents the excess capacity built into the nation’s fiber-optic network in order to avoid the construction expense of always needing to run more cable. In contrast to a DIA purchase, the dark fiber purchaser “lights” the cable with its own technology and maintains direct operational control.
If you’d like more information about the wholesale internet or are interested in becoming a wholesale internet provider, contact NewWave Business We'll work with you to determine the best option for your business, including wholesale bandwidth pricing.