Grades of broadband


What does ‘Grade’ mean? Most broadband today is marketed by quoting the technology, its maximum speed capability and its monthly download allowance. For example “ADSL2+ (up to 24Mbs) with 100GB”.

So why do we hear the following question so regularly:

“Why does the broadband connection for my business cost more than my home connection.”

To help explain the difference, some providers offer ‘grades’ to apparently differentiate the same service, even though they do not change the way they describe the maximum speed.

Terms such as ‘Residential Grade’, ‘Business Grade’, ‘Corporate Grade’ and ‘Carrier Grade’ can be used to give decision makers a feel for how good the performance is and the suitability of the product in relation to their needs.

These grades are not usually just marketing words, and the fact that they exist at all should alert buyers to the possibility that performance varies according to which grade you buy.


Contention The biggest single factor that influences the grade of service is contention.

In its simplest terms, contention in an IP network takes place when two data packets both need to be transmitted by a network resource (like a router) but that resource only has capacity to transmit one. This could be caused by a lack of capacity within the device itself or within the link on which it is trying to transmit the packet. The second packet is therefore buffered for later transmission or ultimately dropped. See our section on packet loss and latency for more information on the impact of this process.

Contention ratios are often quoted within the industry to describe whether contention may occur. Another term often used to describe contention is over-subscription.

For example, if a service provider has 100Mbs capacity between a telephone exchange and its network, and has 100 ADSL2+ users on that exchange all with a theoretical download capability of 20Mbs, then the contention ratio at the exchange could be said to be 200:1. If all of the subscribers demand 20Mbs of download at the same time, then contention will occur and packets will be delayed or dropped. In fact, the subscribers only have to demand more than 1Mbs at the same time for contention to occur.

In a contended network, the speed a customer achieves is almost entirely dependent upon the demand that other customers are putting on the network at the same time.

If there is no contention on a network, and all equipment is capable of process all data packets in a timely fashion, then a customer should be able to achieve the maximum speed of the connection at all times.


What do I need to consider? The higher the contention ratio, the more likely contention is to occur and the more often it is likely to occur.
Contention can also occur at many points within a service provider network, and a service provider may quote (or operate without quoting) different contention ratios for different components of the service. For instance, the ADSL2+ component may be quoted at 10:1, meaning a 10:1 ratio is used between the telephone exchange and the service provider state aggregation point. The provider’s Internet gateway may be in another state, and the provider may use a 20:1 ratio for contending its interstate services. Further, at the Internet gateway, it may use a 50:1 ratio for connectivity to networks other than its own.


Why do providers contend services? Network resources cost money! For many network resources, the more they are used the more they cost. This might include connectivity to exchanges or base stations, interstate backhaul and connection to other carrier networks. The more traffic a carrier transmits, the more capable its equipment needs to be.

So in order to meet the price points demanded by the market, providers share these costs amongst a fixed number for subscribers. With a 100:1 contention ratio, each customer is apportioned 1/100th of the cost so the provider can calculate how much to charge.

The lower the contention ratio, the more the provider has to charge to cover its costs.

An alternative view is that the more subscribers the provider can contend onto the same network resources, the more money it can make.


A note on ADSL and ADSL2+ ADSL is provisioned at the chosen speed, usually with a maximum of 8M/384K.

ADSL2+ is provisioned to go as fast as the copper telephone line permits, which is distance dependent. When the ADSL2+ modem ‘trains up’ with the equipment at the exchange, it negotiates its actual maximum speed.

These speeds are the speed of the ADSL connection, not at the ethernet port of the modem. The speed at the ethernet port is usually around 80-85% of the ADSL speed.

However, once these maximums have been established, there is no reason other than contention or low grade equipment why these speeds should not be achieved 100% of the time.

For example, the customer’s ADSL2+ modem trains up at 12Mbs down and 800Kbs up. The speed at the ethernet port should be around 10Mbs down and around 650Kbs up. If the customer achieves less than this (which most do), then it can only be caused by contention or the use of under-powered equipment (either at the exchange or at the customer premises).


How does Pacific Wireless define the different grades? Whilst terms such as ‘Carrier Grade’ are fairly well understood in the world of hardware, it is often not clear to buyers just what they mean when applied to a service such as broadband.

We provide the following guidelines to understanding the different grades:

“Carrier Grade”

A Carrier Grade service is dedicated for the sole use of the customer. No other traffic passes across the service or any part of it. No contention can possibly take place. An example might be a dark fibre link or a point-to-point link between two customer sites.

“Corporate Grade”

A ‘Corporate Grade’ service is one that runs across the same network resources as services of other customers, but where enough network resources are allocated to ensure that contention does not occur. All service provider equipment is ‘carrier grade’ and all customer premises equipment is capable of processing the maximum throughput of the service being provisioned. This is the minimum recommended grade of service for any medium sized business with 20 or more users.
All Pacific Wireless services are at least ‘Corporate Grade’. We can also build tailor-made ‘Carrier Grade’ service to meet site-to-site requirements.

“Business Grade”

A ‘Business Grade’ service, sometimes referred to as ‘SME Grade’, is one that is contended, but at levels much lower than a residential grade service. Typical figures seen in the market place can be between 4:1 and 50:1. All service provider equipment is generally ‘carrier grade’ and all customer premises equipment is usually capable of processing the maximum throughput of the service being provisioned.

“Residential Grade”

A ‘Residential Grade’ service is one that is contended, often at high levels. Typical figures seen in the market place can be between 50:1 and 1000:1. Not all service provider equipment may be ‘carrier grade’ and the choice of customer premises equipment is often left to the consumer.


One final point We are often asked another question about grades of broadband:
“Why is the broadband connection at my office no faster than my home connection, even though it is business grade and rated at the same speed?”

It’s important to remember that at home, your connection is usually only used by one person at a time. At work, the connection may be used by many people all at the same time. In that case of a workplace with 20 users, the connection is effectively contended at 20:1 before it even gets to the service provider network, and the performance of one user will depend on what the other users are doing on the link at the same time.

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