ACG - Agency Consulting Group


A national monthly newsletter for agency principals dedicated to agency management topic

To Web or Not To Web

A series devoted to explaining the Internet, its capabilities, limitations and potential to insurance professionals who need to know, but spend their time running their businesses and selling insurance.


By now most of us understand that we must connect to the Internet by means of some device. There are currently six Internet delivery vehicles competing for the business of the average business. This article will describe each in basic terms with their pros and cons.

Dial Up – This is how most of the world gets to the Internet today. Most people use 28Kbps (that’s Kilobytes per second, approximately 1,000 bytes of information) or 56Kbps, which is presumably twice as fast as 28Kbps. Unfortunately most telephone lines are not capable of managing 56Kbps, so the fastest that most people can access is about 43Kbps. That is one of the main limitations of dial-up. Modems don’t cost much but the wait for screens, uploads and downloads seems interminable. Most of us do not want to sit in front of a “working” screen for up to a minute before our image comes through. Some of the wait has to do with traffic on the Internet (or on your gateway (i.e. AOL, MSN, Prodigy, etc.)). Like any traffic jam, you could be in your Ferrari, stuck in line behind a Yugo. But much of the delay problem is that a modem is simply not capable of managing a large volume of data fast enough to be transparent to the consumer.

ISDN (Integrated Services Digital Network) lines are meant to carry as much as 128 Kbps, twice as much as a dial-up. However, installing ISDN lines is expensive, needing new hardware to replace your modem. And running ISDN can be expensive, as well. During the three months that I used ISDN my Internet connect costs went from $30/mo (unlimited dial-up use) to $300/mo for the same usage (charged on a per minute basis on two lines – required on ISDN connections). Finally, twice as fast still wasn’t fast enough to avoid long waits. The Catch-22 is that the streaming of information on the Internet is like a pipeline. The speed of the interaction is limited to the flow-through at the narrowest part of the pipeline. So, unless everyone has ISDN or faster connections, you will suffer similar slow-downs as you connect through 56Kbps modems.

DSL (Digital Subscriber Lines) digitizes data and still transmits it over telephone lines, usually old, copper wire. DSL can carry 1 mbps (megabytes per second), so your transmission will definitely be faster than the previous models. The cost is less than ISDN but more than dial-up. Limitations to DSL are that it is still only available in limited areas (growing every day) and you may still experience problems if you are in a copper wire telephone area (rather than fiber optic networks that solve all speed problems). DSL is the first medium that permits full time permanent Internet access. If your computer is ‘on’, you are on-line.

Cable Modem provides speed and digital data similar to DSL but over the lines of your cable provider. Costs are similar as are speed and limitations. Of course you must subscribe to cable to get cable modem and many businesses don’t need cable for anything else (and it is more expensive for businesses to hook up than individual homes).

T-1 is the telephone company’s “high rent” district. Sending data at 1.5 Mbps, a t-1 line can cost $1,200/mo. The best use of T-1 lines is for agencies that have multiple locations and need constant open lines between the two for data transmission. Those having T-1 lines for this purpose can easily use them for high-speed, full-time, permanent Internet connection.

Fiber Optics uses light signals of digitized data over fiber optic cable. If you’re lucky enough to live in an area that has been upgraded to fiber optics, you may be able to enjoy 10 mbps speed – instantaneous (for all practical purposes) Internet connectivity. The cost is much less than T-1 lines but your building must be serviced by a fiber optic network (this is either very pricey or requires many participating businesses signing up for the service). This means that businesses in office buildings in major metropolitan areas will see fiber optic Internet service much sooner than anyone else.

Coming Soon: Satellite Modems that provide you Internet access over the airwaves without any connectivity issues at all. A small dish will be all you need to provide the fastest access possible with no line needs at all.