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What Is Fiber-Optic Internet for Business?

Updated Nov 08, 2023

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When choosing high-speed internet for your business, consider fiber-optic internet. Fiber-optic connections are among the fastest and most reliable there are, but this speed comes at a cost. 

In this article, we share what fiber-optic internet is, how it works, how fast it is, what it costs to install and what its main benefits are. We also compare it to the other major internet connection types so you can decide whether fiber-optic internet is best for your business.

What is fiber-optic internet?

Fiber-optic internet uses single-mode fiber (SMF) or multimode fiber (MMF) cables to deliver the internet to your business.

It’s widely regarded as one of the fastest internet options available, providing speeds faster than what other internet networks can handle.

How does fiber-optic internet work?

Fiber-optic cables use light signals to transmit data. 

This light — which sends and receives data more efficiently and with less interference than signals sent through copper lines or coaxial cables — is transferred via the glass core inside each cable. Fiber-optic cables transmit data faster than cable wires and other methods of transferring data over the Internet.

The cables used for fiber-optic internet traffic can either be “lit” or “dark.”

Lit cables are already live, meaning you can send and receive internet traffic over them. Your service provider sends you the equipment you need to connect to it.

Dark cables have been laid for future network expansion but are not yet in use. Upfront connection costs are higher because they require activation, but their benefits include having dedicated bandwidth for your company and more control over the network.

The fiber-optic cables themselves are ultrathin — less than the width of a human hair. In addition to their glass core, fiber-optic cables contain a protective layer of plastic or glass around the core called cladding. The cladding ensures the light signals that transfer the fiber-optic internet won’t get lost, which reinforces the connection’s high speeds.

FYIDid you know

Stock market traders and financial institutions invest vast sums of money in the highest-end fiber-optic internet connections. This is so their trading bots get pricing data milliseconds ahead of everyone else, meaning they gain a competitive edge. Nothing is currently faster than fiber-optic internet.

How is fiber-optic internet installed?

There are two parts to a fiber-optic internet installation — external and internal.

Fiber-optic cables are often buried underground, but some can be placed along telephone poles above ground. This infrastructure must be in place before your business connects to fiber-optic internet.

Before installation, you must confirm whether your area is serviced by fiber-optic internet. You can verify this by searching online for providers near you that support and install fiber-optic internet. Your local internet service provider (ISP) may determine this by your ZIP code, neighborhood or precise address.

Once you determine that your business can access fiber-optic internet, you can schedule a date to have it installed. You can opt for either a dedicated fiber-optic internet connection or a shared fiber-optic internet connection. Here are the differences between the two connection types:

  • dedicated fiber-optic connection is reserved solely for your business. Only activities related to your company are conducted on the network. This can help ensure that the network has less lag, that it delivers promised speeds on time, and that you have full control over precisely which devices are using and sharing the network. The downside, however, is that installation may be more expensive, complicated and lengthy. Installation for a dedicated fiber-optic connection is a much more involved process than it is for a shared connection. A dedicated fiber-optic connection requires a path leading from the provider network to your router, the right power source to maintain the connection, and equipment to properly ground the fiber-optic cables.
TipBottom line

A dedicated fiber-optic connection is best for businesses that rely heavily on cloud-based software, data analytics, streaming and similar high-bandwidth activities. It is also the connection type best suited for companies that want added network security.

  • shared fiber-optic connection splits the service between your business and other businesses in your area, whether those businesses are located in the same building as you or elsewhere in your neighborhood. Naturally, sharing a fiber-optic connection can reduce your monthly bill, but your connection may be slower during peak times (although it will still be very fast by other internet connection standards). Installation is also less complicated, as the infrastructure is already in place. A shared fiber-optic connection utilizes a single strand to service several companies at once. To prepare a shared fiber-optic connection to serve your business, the ISP will place splitters to send the signals to different businesses and allow each company to receive the service.

Once you choose a dedicated or shared fiber-optic connection, the next step is to set up the connection in your company’s space. Choose a place where the fiber-optic equipment is safe; this sensitive equipment cannot be exposed to heat, humidity or dust. The ISP will install the equipment and test the connection to ensure that it’s working before completing installation.

How fast is fiber-optic internet?

Fiber-optic internet is widely regarded as one of the fastest connection types for business and home use. Fiber-optic cable can deliver speeds of up to 100 gigabits per second (Gbps), although most fiber-optic internet connections typically clock in at around 1 Gbps. 

The speed of a fiber-optic connection can be limited by the provider’s offerings and whether your connection is hardwired or via a Wi-Fi setup, among other considerations. Even at 1 Gbps or under, your company can transfer large files, stream video, rely on cloud-based software, and conduct other high-intensity tasks faster than other types of high-speed internet.

How much does fiber-optic internet cost?

The cost of fiber-optic internet depends on the ISP, the minimum guaranteed speeds and your location, among other factors. Prices start at about $50 per month, but the cost can run into hundreds of dollars for the very fastest connections. You may also face additional charges, including installation fees, equipment purchases or equipment rental.

Benefits of fiber-optic internet for business

Fiber-optic internet is an appealing option for many businesses. However, its advantages amount to more than speed alone. Here’s what makes fiber-optic internet a good option for your business.

Great for high bandwidth use

If your employees stream video, transfer large files back and forth, run webinars, or conduct other high-intensity tasks at the same time, fiber-optic internet can support these uses without impacting your overall speed.

Fast upload time

Files typically upload and download at different speeds, as internet networks are designed to download faster than they can upload. (This is seen in the FCC’s minimum download and upload speed requirements: Minimum download speeds are set at 25 Mbps, while minimum upload speeds are set at 3 Mbps.)

Fiber-optic internet takes the need for uploading speed into account. If you livestream content, this should be a top feature you look for in an internet provider.

Fiber-optic networks offer download and upload speeds that are much closer to each other than with other types of high-speed ISPs.

FYIDid you know

Fiber-optic internet is the fastest type of internet connection, but it’s not widely available yet. According to a report from the Fiber Broadband Association (FBA) 43 percent of American homes have access to the technology as of 2022.

Delivers performance without sacrificing speed

With other internet connection types, many devices that use the network simultaneously can slow the network’s overall speed. 

Fiber-optic internet can sustain these dips and ensure fast speeds, no matter how many devices use the network.

Less latency

Latency is the time it takes for the internet signal to travel. This period of time, measured in milliseconds, helps determine the speed of your internet connection. 

Because fiber-optic cables offer superior data transfer compared to other cables, they boast less latency than other high-speed internet types.

More reliable

Most fiber-optic cables — those buried underground — are not affected by wind, storms, rain, snow or other elements. 

This means that a storm is less likely to knock out your internet connection, which creates more uptime for your business and your employees who rely on fast, reliable, and stable internet to do their jobs.

How does fiber-optic internet compare with other high-speed internet types?

As you evaluate your business internet options, you’ll come across many types and read the pros and cons of each. Here, we compare the major differences between fiber-optic and other internet types.

Fiber-optic internet vs. cable

Cable internet uses the same coaxial cables that transmit television to deliver internet service to your business. 

These copper-core cables use electrical currents to transmit data from the ISP to your business. Access to cable internet is ubiquitous: If your company already has a cable TV hookup, adding cable internet is generally easy.

Cable internet connections can support fast speeds, reaching 1,000 Mbps and beyond. However, they are still nowhere near as fast as fiber-optic internet can be. Cable internet also does not support relatively equal download/upload speeds — fiber-optic internet is much better for that. 

While cable is still much faster than DSL and other connection types, it is also subject to more power outages than fiber-optic internet.

Fiber-optic internet vs. dial-up

The primary difference between fiber-optic and dial-up is how the internet is delivered. Dial-up internet uses phone lines, while fiber-optic internet uses dedicated cables.

Dial-up internet was one of the first available technologies to deliver internet to businesses and homes, but today it is also one of the slowest. Dial-up modems cannot support speeds beyond 56 kilobytes per second (Kbps) due to the technical limitations of the device.

The adoption of new and emerging technologies has made dial-up internet a less popular choice over time. However, dial-up is still the only option for some businesses and homes in rural areas that are not yet serviced by fiber-optic and other high-speed internet providers.

Fiber-optic internet vs. DSL

Short for “direct subscriber line,” DSL internet was innovative when it was first introduced. These direct subscriber lines separate the internet from voice traffic so you can use the phone and connect to the internet at the same time. This is a must for today’s businesses, many of which rely on the Internet to stay connected and perform daily business functions.

Like dial-up, the major difference between DSL and fiber-optic cable is speed. DSL speeds typically do not exceed 35 Mbps, a far cry from the 100 Gbps and beyond that fiber-optic internet can reach.

DSL can be difficult to work with if your workforce frequently downloads or uploads large files or streams content. DSL connections may also be overburdened by multiple devices using the network at the same time, which greatly dissipates the already-slower speeds this connection type offers.

In terms of pricing, DSL is more affordable than fiber-optic internet. This is because DSL’s infrastructure already exists through the phone lines. It’s also more readily available than fiber-optic because it utilizes these existing networks.

Bottom LineBottom line

In our article covering the main differences between business DSL and cable internet, we recommended DSL for companies that have no plans to expand and only wanted basic internet usage and low pricing. Cable internet is better for growing businesses that run a lot of cloud-based software, including cloud storage and data analytics apps. [Related article: 10 Tips for Choosing the Right Web Hosting Company]

Does your business need fiber-optic internet?

Deciding whether to move forward with fiber-optic internet depends on your company’s needs and the price you’re willing to pay. For small companies on a budget, the higher cost of fiber-optic internet may not be worth the speed.

If your organization regularly uploads and downloads large files, participates in video conferences, or relies on cloud-based software that requires the internet to operate, fiber-optic internet may be your best option.

However, this all depends on whether fiber-optic internet is available for your business: As an emerging technology with infrastructure still being built out, you may not be able to easily access fiber-optic internet. For more information, check with your local ISP.

Who are the best fiber-optic internet providers?

If you decide to invest in fiber-optic internet for your internet, here are some of the best internet service providers offering that type of connection:

  • AT&T Business Internet: AT&T offers super-fast business fiber-optic plans without an annual contract, and you can bundle VoIP and cell phone to your fiber-optic plan for greater savings. Learn more in our review of AT&T Business Internet.
  • Comcast Business Internet: You can achieve download speeds of up to 1.25 Gbps with Comcast’s fiber-optic plan. The service has 99.9 percent uptime and provides 24/7 customer support. Learn more in our review of Comcast Business Internet.
  • Spectrum Business Internet: Spectrum’s month-to-month contracts stand out and don’t cap data or throttle speed. Learn more in our review of Spectrum Business Internet.
  • Verizon High-Speed Internet: Verizon has some of the fastest internet speeds on the market, with nearly equal speeds for downloads and uploads. Learn more in our review of Verizon High-Speed Internet.

Stella Morrison contributed to this article. 

Mark Fairlie
Mark Fairlie
Senior Analyst & Expert on Business Ownership
Mark Fairlie has written extensively on business finance, business development, M&A, accounting, tax, cybersecurity, sales and marketing, SEO, investments, and more for clients across the world for the past five years. Prior to that, Mark owned one of the largest independent managed B2B email and telephone outsourcing companies in the UK prior to selling up in 2015.
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