Two quotes land on your desk for a 1 Gbps circuit to the same suite. One is $740 a month, the other $1,340. Neither carrier is lying. They are answering different questions, and until you know which question each one answered, you cannot tell which quote is the better deal. Usually it is not the one you think.
Below is every reason we have seen for a gap like that, roughly in order of how often it explains the difference.
On-net versus near-net versus off-net
This is the big one. A carrier is on-net when its fiber already terminates inside your building, usually in a telecom closet or the basement meet-me room. Turning up a circuit for an on-net carrier is a configuration change and a cross-connect. There is no construction, no permit, no crew.
Carrier pages like Comcast Business show how on-net status changes a carrier's early termination terms as well as its price.
A carrier is near-net when its fiber runs past the building (down the street, or into the building next door) but does not enter yours. To serve you it has to build a lateral: trench or bore from the street, pull fiber through conduit, and terminate it inside. That is a construction project with a real cost, and somebody pays for it.
An off-net carrier has no fiber nearby at all and will either build a long lateral or, more commonly, rent a circuit from a carrier that is on-net and resell it to you with a margin on top.
In the example above, the $740 quote is almost certainly on-net. The $1,340 quote is a near-net carrier that has taken its construction cost, spread it across the term, and folded it into the monthly rate. Both carriers can deliver a 1 Gbps circuit with the same SLA. Only one of them has to dig.
Where the build cost goes
Carriers handle construction cost in one of three ways, and the way they chose changes the shape of the quote without changing its size.
Waived install, higher monthly. The construction is amortized across the term. The quote looks clean, with $0 install, but every month carries a piece of the trench.
Shown as a one-time charge. The monthly rate is lower, and there is a line for “construction” or “special construction” that can run from a few thousand dollars to well into five figures.
Waived on a longer term. The carrier will eat the build if you sign for 36 or 60 months instead of 12, because the extra months cover it.
This is why a 36-month term with a waived install and a 12-month term with a $9,000 build charge can look identical on a monthly basis and be thousands of dollars apart over the life of the contract. You are not comparing two prices. You are comparing two financing structures.
Term length changes the monthly number
Even with no construction involved, the same carrier will quote the same circuit at different rates for 12, 24, 36 and 60 months. Longer terms are cheaper per month because the carrier’s cost to acquire and provision you is spread over more billing cycles, and because it reduces the chance you leave. A 12-month quote and a 36-month quote from two different carriers are not comparable until you put them on the same term.
When you ask for quotes, ask for the same term from everyone. If you genuinely do not know whether you will be in the building in three years, ask for 12 and 36 from each carrier and look at both columns.
What “1 Gbps” actually includes
Two quotes for “1 Gbps dedicated internet” can describe different products.
Committed versus burstable. A dedicated circuit with a 1 Gbps committed information rate (CIR) guarantees the full gigabit. Some quotes are for a 1 Gbps port with a lower commit and burst pricing on top. Check the CIR line.
Port size. A 1 Gbps service on a 1 Gbps port cannot be upgraded without a truck roll. The same service on a 10 Gbps port costs a little more today and can be turned up to 2, 5 or 10 Gbps with a phone call. If growth is plausible, the more expensive quote may be the cheaper one over three years.
IP addresses. A /29 block is often included; a /27 or larger is often not. If you need public IPs for VPN endpoints or hosted services, the quote that includes them is doing more.
Equipment. Some carriers include a managed router or optical terminal; some hand you a fiber patch cable and expect you to have your own gear. That is a real cost either way.
The SLA is part of the price
Dedicated circuits come with a service-level agreement covering availability, latency, packet loss and mean time to repair. They are not all the same. A 99.99% availability commitment with a four-hour repair window is a different product from 99.9% with next-business-day repair, and it costs more to deliver. If one quote is meaningfully cheaper, read its SLA before you read anything else. Some low quotes are for a product that is dedicated in name but best-effort in practice.
Timing: two weeks or ninety days
The cheaper on-net circuit is also, almost always, the faster one. An on-net turn-up is typically measured in weeks. A near-net build is measured in months: permits, utility locates, construction windows, weather. If you have a lease start date or an existing contract expiring, the interval matters as much as the rate. A carrier that cannot deliver before your old circuit ends is not actually cheaper once you count the month-to-month penalty on the circuit you had to keep.
A worked example
Take the two quotes from the top of this post and put them on a 36-month term.
Carrier A (on-net): $740 a month, $0 install, 10 Gbps port, /29 included, 99.99% SLA, 3-week install. Three-year cost: $26,640.
Carrier B (near-net): $1,340 a month, $0 install (waived on 36 months), 1 Gbps port, /29 included, 99.99% SLA, 90-day install. Three-year cost: $48,240.
Same building, same speed, same SLA, and a $21,600 difference, all of it construction that Carrier B has to do and Carrier A does not. Now change one fact: suppose Carrier A were only willing to quote 12 months at $890 with a $4,500 install. Its three-year cost, assuming two renewals at the same rate, is about $36,540. Still cheaper than B, but the gap has closed by more than half, and now the question is whether Carrier A will hold that rate at renewal. That is a conversation to have before you sign, not after.
The questions that close the gap
Every quote you receive should be able to answer these. If a salesperson cannot, that is information too.
Are you on-net at this address today? If not, what is the build, and who pays for it?
What term is this quote for, and what is the same circuit at 12, 36 and 60 months?
What is the committed rate and what is the port size?
What IP block is included, and what equipment?
What are the availability and repair commitments in the SLA?
What is the install interval, in calendar days, from signature?
Frequently asked questions
Why do two carriers quote different prices for the same building?
Usually because one carrier is on-net and the other is not. An on-net carrier already has fiber in the building and only needs a cross-connect, while a near-net or off-net carrier has to build a lateral or resell another carrier’s circuit, and that cost shows up in the price.
What is the difference between on-net, near-net and off-net?
On-net means the carrier’s fiber already terminates inside your building. Near-net means its fiber runs nearby, so it must build a lateral into the building. Off-net means it has no fiber close by and will either build a long lateral or resell a circuit from a carrier that is on-net.
How do carriers charge for construction?
In one of three ways: a waived install with a higher monthly rate, a separate one-time construction charge, or a build that is waived in exchange for a longer term. Each changes the shape of the quote, so compare total cost over the term rather than the monthly rate.
Why does term length change the monthly price?
Longer terms spread the carrier’s cost to acquire and provision you over more months and reduce the chance you leave, so 36- and 60-month rates are lower than 12-month rates. Ask every carrier for the same term so the quotes are comparable.
What should I check when two quotes both say 1 Gbps?
Check the committed information rate, the port size, the included IP block, the equipment and the SLA. A 1 Gbps service on a 10 Gbps port can be upgraded without a truck roll, and a cheaper quote may carry a weaker availability or repair commitment.
Is the cheapest quote usually the fastest to install?
Often, yes. An on-net turn-up is typically measured in weeks, while a near-net build can take months for permits, locates and construction. If your current contract or lease has a hard date, the install interval matters as much as the rate.
We ask every carrier these questions on every request, then normalize the answers to total cost of ownership over the term you actually want, so the numbers you compare were built to be compared. Or you can send us the address and we will ask two hundred of them for you.