Area Development
As corporations grow to depend on the exchange of information as a core business function, a nearly universal expectation that fast and reliable communication services will be available at all operating locations also develops.

In recent years, the trend is for corporate enterprise networks to be built on a fast and reliable Internet backbone. It seems that virtually all operations - from back office to manufacturing, from R&D to distribution - rely on the Internet and the speedy exchange of information. This explains why availability of high-speed Internet access ranked among the top-10 factors in Area Development's 2006 Corporate Survey.

Defining "High Speed"
In order to assess the suitability of a site relative to Internet service, it's important to establish a measure of "high speed." The term "high-speed" means different things to different business applications. The Federal Communications Commission (FCC) defines high-speed broadband service as "data transmission speeds exceeding 200 kilobits per second (Kbps), or 200,000 bits per second, in at least one direction: downstream (from the Internet to your computer) or upstream (from your computer to the Internet)." While 200 kilobits per second (Kbps) qualifies as high speed, data transmission rates utilized by business are often far in excess of this speed. This is discussed in greater detail below.

Moreover, several transmission methods fall under the broadband designation including DSL (digital subscriber line), cable modem, fiber, wireless, satellite, and broadband over power line (BPL). Today, as high-speed Internet service often runs concurrent to cable or telephone services, high-speed Internet availability has really become a subset of telecommunications availability.

Service Speed and Availability

The most appropriate service for a specific business operation will depend on a number of factors, such as speed requirements, cost of service, reliability, and capacity. The most commonly available Internet services are DSL via copper telephone lines and cable modem provided by cable television lines. These services will typically suffice for small businesses, including local manufacturers and distribution operations.

However, many business operations require a higher level of Internet speed, reliability, and capacity. These can include back-office operations, headquarters, data centers, call centers, major distribution centers, and large manufacturing operations. For these applications, Internet access delivered via T1, T3, or OC service may be needed. Although the availability of these services is growing, they are not as readily available as DSL and cable.

T1, T3, or OC services are dedicated point-to-point, high-capacity digital services capable of transmitting data at speeds from 1.544 megabits per second to 9.6 gigabits per second (compared to 200+ kilobits per second with DSL or cable modem). The appropriate service level for a facility depends on the size of the company and operation, but most large companies will need something more than a T1 line. The list below shows some of the common high-speed line designations and speed of service:

    • T1 - 1.544 megabits per second
    • T3 - 43.232 megabits per second (28 T1s)
    • OC3 - 155 megabits per second (84 T1s)
    • OC12 - 622 megabits per second (4 OC3s)
    • OC48 - 2.5 gigabits per seconds (4 OC12s)
    • OC192 - 9.6 gigabits per second (4 OC48s)

Not only are T1, T3, and OC lines effective for high-speed Internet, they are also used for connecting networks across remote distances. Through T1, T3, and OC networks, companies are able to connect to Local Area Networks (LANs), which can link computer systems at multiple facilities of one company. For example, Austin Consulting is able to link Austin Company offices in Cleveland, Atlanta, and Irvine by utilizing a LAN, where individuals are able to access the same files and share information through a corporate network.

High-Speed Internet and Site Selection
When it comes to site selection, the importance of high-speed Internet availability depends on the type of operation and the project requirements. For an operation that requires T1, T3, or OC service, the availability of such service often quickly narrows the search area.

As these are direct point-to-point lines, a community must have a service provider central office in the area in which a T1, T3, or OC line can be linked. There may also be distance restrictions from the user location to the central office. Depending on the type of line used (copper vs. fiber optic, for example), the level of service will deteriorate at different rates as the user moves further from the service provider central office. Consequently, rural areas and small towns are far more likely to have difficulties in fulfilling high-speed access requirements compared to metropolitan areas. Metropolitan areas often have multiple service providers and central office locations capable of supporting T1 service or better.

In a recent site selection project, Austin Consulting was engaged to help locate a data center for a large manufacturing company with multiple facilities across North America. The client utilized an enterprise resource planning (ERP) system to control operations. The company's network and ERP system were hosted from one of its manufacturing operations. Due to data security and stability concerns, the client decided to relocate the data center to an off-site location and was looking for a site that was serviced by two T1 lines from two competing service providers. Because the new data center would house the ERP system for the entire corporation, the client desired redundancy to ensure continuous service in case one line was to go down.

The need for high-speed Internet service will continue to grow as more business operations adopt Internet-based enterprise systems. During site selection for new operations, careful research is required to ensure the right service is available. Decision-makers must be diligent in their investigation given the rapidly changing telecommunications landscape. More lines and more advanced technologies are constantly finding their way to the market, making this a site selection factor that is bound to be on a top-10 list for a long time to come.

Austin Consulting is an industry leader providing global analysis, site selection, due diligence, and incentive negotiation for manufacturing plants, distribution facilities, R&D centers, and office operations. Austin Consulting is an extension of The Austin Company, headquartered in Cleveland with offices in Atlanta, Ga., and Irvine, Calif., and is a wholly owned subsidiary of Kajima USA.