Does your ISP Matter? Is Internet Connectivity a Commodity?

In this post, we examine the characteristics of internet access and the ISP experience that are fully commoditized as well as those that are not.

internet-thinking 1
Dennis Thankachan

Nov 12, 2021


A commodity is a good or service that is the same as / interchangeable with other goods or services of the same type. Effectively, commodity goods can be substituted with one another and you’d likely not even know the difference. Great examples of commodities are water or gasoline.

Internet access is often referred to as a commodity or utility. At the end of the day, you’re paying a vendor to transmit bits to and from your home or business across a wire at a certain speed. Does it even matter who the ISP is providing the service? If you switched ISPs and kept certain variables constant (speed, etc.), would you even notice the difference?

Although it may not seem so, internet connectivity lies somewhere on the spectrum between commodity and differentiated product (albeit, closer to the commodity end of the spectrum). In this post, we’ll examine the characteristics of internet access and the ISP experience that are fully commoditized as well as those that are differentiated across vendors.

As a note, this post will be oriented around business connectivity, as many of the features listed below don’t come into play for residential internet service unfortunately.

“Commoditized” Characteristics of Internet Access

It may not be obvious, but the below characteristics of an internet connection are almost fully commoditized. When we say “commoditized” in this post, we mean that if you kept variables constant and changed ISPs, you’d likely not even notice the difference, i.e. the various ISP services would be perfect substitutes.

Bandwidth / Speed

First, let’s talk bandwidth vs. speed. Bandwidth is the maximum capacity for transmission of bits across your internet connection, while speed is the maximum rate of transmission of bits across your connection (measured across both download and upload). So long as you have multiple ISP options available to you with infrastructure capacity up to 10Gbps or more, you will pay a higher price for more bandwidth / speed, but you will not notice a difference across carriers at the same bandwidth / speed.

We did a full blown pricing analysis on Dedicated Internet Access (DIA) circuits, in which we show how DIA pricing scales with bandwidth. Check out the Dedicated Internet Access pricing report here.

SLAs and MTTRs

If you’re paying for Dedicated Internet Access (DIA), your internet connection will come with multiple Service Level Agreements (SLAs) that guarantee uptime of >99.9% and provide guarantees around certain connection quality metrics such as latency, jitter, and packet loss.

Additionally, the ISP will guarantee a Mean Time to Response (MTTR) in the case of a support issue of 4 hours or less in most cases. Although different carriers can have slight differences in their SLAs (99.999% on uptime vs. 99.9% on uptime), you are very unlikely to notice a difference in ISP performance driven by a different SLA. Every DIA connection comes with very similar SLAs these days, while a Best Effort connection of any sort is unlikely to come with any SLAs or performance guarantees.

Managed Router / Hardware

Although carriers may push you toward paying for a managed router, the entire ISP hardware stack is fully commoditized at this point and should bear no impact on the quality of connection or experience received. A carrier-managed router can add a real amount to your monthly internet bill however!

Localized / Non-Vendor Aspects of Differentiation

The below characteristics of any ISP connection will result in potentially noticeable performance differences depending on the actual ISP you end up working with. However, these are all “localized” points of differentiation. For example, a difference in connection performance tied to the specific transport AT&T has installed at a given site / the point of entry AT&T is using at a specific building rather than a performance difference tied to AT&T itself (AT&T may have different transport at other sites, for example).

The characteristics outlined in this section are worth diligencing for a new circuit even if you’re highly familiar with the ISP you’ll be working with.

Transport Infrastructure and Capacity

Is your connection going to be riding over fiber or coax / copper? Do you need to eventually upgrade your bandwidth to 10Gbps or more? Although most Best Effort connectivity is delivered over coax these days, certain ISPs will offer symmetric Best Effort connectivity over fiber that is priced like a coax circuit but built to perform like a DIA. When they’re available, these services (such as AT&T ABF or Verizon FiOS) typically represent amazing bang for buck!

Further, if you’re buying a DIA and eventually need to upgrade speeds above 1Gbps or 10Gbps, it’s worth validating that the carrier has adequate electronics and provisioning capacity in place to accommodate your eventual upgrades. This could mean the difference between a “flip of a switch” simple upgrade or a painful upgrade that feels more like a completely new implementation.

On-Net vs. Near-Net / Off-Net

The on-net vs. off-net distinction refers to whether a carrier is already present in a given building or whether the carrier may need to do construction to get into the building. Although customers often prefer to work with an on-net provider (shorter install timelines, and sometimes lower pricing), off-net vendors may sometimes price as if they’re on-net and make it seem like it’ll be easy to get infrastructure installed.

This is not always the case, and bringing in an off-net provider is subject to all sorts of potential delays (these are often construction projects) that could impact your experience. Be sure to validate that the carrier is on-net or can meet your install deadlines before signing anything!

Point of Entry

If you’re looking for true redundancy in your ISP connections, it’s important to validate at what point each ISP enters a given building and optimize for ISPs who are utilizing different physical points of entry. If it so happens that a local issue impacts one of your links, the connection with the separate point of entry will hopefully continue to operate uninterrupted. You can read more on physical network diversity here.

Local Path Redundancy and Resiliency

At a local level, is your ISP’s infrastructure single-threaded or tied to multiple loops / points of exchange? If you’re seeking redundancy, are your ISPs tied to the same routes / loops? Is the fiber aerial or underground? When buying new redundant circuits, especially if network performance is mission-critical, it’s worth diligencing each circuit’s local path to ensure adequate redundancy and gauge any potential for a complete network failure.

Vendor-Oriented Aspects of Differentiation

The below characteristics of your ISP experience are not commoditized, meaning they can lead to significant differences in experience depending on ISP selected. These characteristics are tied directly to the vendor you pick and how they’ve architected their network and built out their back-office infrastructure.

These are the points where, yes, the ISP you pick does matter.

Network Coverage

If you’re operating a national or international network with many nodes, you’ll likely care about a given ISP’s network reach. More coverage means that the carrier relationship you’ve built will more likely translate across your entire company’s footprint, and that you’ll see a bit more uniformity across quoting, installation, billing, and support.

More volume with a single carrier will also likely mean more negotiating leverage for discounts, and getting a single bill for most of your circuits is probably nice too. This is of course where big carriers reign supreme - companies like Comcast and Spectrum cover >50% of the US each for example.

Core Network Redundancy and Resiliency

How strong is your ISP’s network backbone? Sometimes (but not always), the carriers who consistently can quote the cheapest connectivity on a per-megabyte basis keep their operating costs low with a “single-threaded” (lacks redundancy and optimizations for traffic flow) network that may be more prone to outages or packet loss than another carrier’s network.

Noction puts together a quite good holistic summary of Tier 1 carrier network performance that may be helpful as you evaluate carriers on these metrics. You can read their most recent issue here.

Network Peering

If your network is going to utilize a specific cloud (AWS for example) or a certain software / website more so than others (i.e. tons of Netflix traffic), it’s likely worth investigating how well a given carrier you’re evaluating is peered with your cloud, content delivery networks (CDNs), and software of choice at both the edge and backbone levels.

Most national and global carriers have comparable peering presences with all of the major cloud and software providers, but at the edge or regional carrier level, there can at times be differences worth investigating.

Support Infrastructure

Hopefully you’re rarely in the situation where you’re calling ISP support, but I’m certain you’d like for the experience to be streamlined when you are.

How many NOCs (Network Operations Centers) does your carrier have and are they all 24x7x365? Does your carrier have the means to accept support tickets online / via email in addition to phone-based support? Do you get proactive outage notifications?Surprisingly, better support doesn’t always come with scale, so investigating a carrier’s support infrastructure and perhaps even talking to a couple of reference customers can help you better understand whether bad support will be a point of pride or stress in your ISP experience.


Is internet connectivity a commodity? Yes and no. Yes, getting bits on a wire at a given speed so long as the network is up and running IS very much a commoditized experience. That said, if you’re running a mission-critical network across even a regional geography, differences in local infrastructure, carrier coverage, and carrier back-office infrastructure can make a HUGE difference in how you’d characterize your ISP experience.

If you’re ever looking to get the most exhaustive ISP search out there for your new circuit bids (and one that will also proactively call out several of the facets described above), check us out at Lightyear!

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