Leased Line

A permanent telephone connection between two points set up by a telecommunications common carrier. Typically, leased lines are used by businesses to connect geographically distant offices. Unlike normal dial-up connections, a leased line is always active. The fee for the connection is a fixed monthly rate. The primary factors affecting the monthly fee are distance between end points and the speed of the circuit. Because the connection doesn’t carry anybody else’s communications, the carrier can assure a given level of quality.

For example, a T-1 channel is a type of leased line that provides a maximum transmission speed of 1.544 Mbps. You can divide the connection into different lines for data and voice communication or use the channel for one high speed data circuit. Dividing the connection is called multiplexing.

Increasingly, leased lines are being used by companies, and even individuals, for Internet access because they afford faster data transfer rates and are cost-effective if the Internet is used heavily.