What Is a Leased Line in Networking?

Businesses use leased lines to connect two or more locations

A leased line, also known as a dedicated line, connects two locations for private voice and/or data telecommunication service. A leased line is not a dedicated cable; it is a reserved circuit between two points. The leased line is always active and available for a fixed monthly fee.

Leased lines can span short or long distances. They maintain a single open circuit at all times, as opposed to traditional telephone services that reuse the same lines for many different conversations through a process called switching.

Data center with server racks
 Mark Horn / Getty Images

What Are Leased Lines Used For?

Leased lines are most commonly rented by businesses to connect branch offices of the organization. Leased lines guarantee bandwidth for network traffic between locations. For example, T1 leased lines are common and offer the same data rate as symmetric DSL

Individuals can theoretically rent leased lines for high-speed internet access, but their high cost deters most people, and far more affordable home options are available with higher bandwidth than a simple dial-up phone line, including residential DSL and cable internet broadband service.

Fractional T1 lines, starting at 128 Kbps, reduce this cost somewhat. They can be found in some apartment buildings and hotels.

Using a Virtual Private Network (VPN) is an alternative technology for using a leased line. VPNs allow an organization to create a virtual and secure connection between locations as well as between those locations and remote clients such as employees.

Broadband Internet Services

For consumers who are looking for internet access, a leased line is usually not a feasible option. There are fast broadband internet connections available that are much more affordable. 

Access to these broadband services varies depending on location. In general, the farther from a populated area you live, the fewer broadband options are available.

Broadband options available to consumers include:

  • Digital Subscriber Lines: DSL service uses existing telephone wiring to deliver broadband service. Voice telephone service does not use all of the broadband capacity of the telephone system's copper twisted pair of wires, and DSL utilizes the free space.
  • Cable Modems: Cable service represents another pre-existing wire into many homes. The coaxial cable is used to carry the additional broadband internet signal.
  • Wireless BroadbandWireless Broadband uses a radio link between the user's location and the service provider's facility. The range is limited, making availability more limited as well.
  • Wireless Cell Phone Internet: Broadband service is often available using cellular signals that are commonly used by smartphones. Though not as fast as DSL or cable and expensive if you have high data usage, this option is faster than dial-up for rural customers.
  • Satellite BroadbandSatellite broadband service may be the only broadband service available in rural areas. The service often accompanies satellite television service and uses the same receiver for downloading. The speed is not as fast as other services, but it is still much faster than dial-up service. The main downside is the costly price tag for equipment and the service.
  • What is the name of the device that terminates a dedicated leased line circuit?

    A channel service unit/data service unit (CSU/DSU) is required when using dedicated circuits as it terminates physical connections. Therefore, CSU/DSUs are increasingly integrated into T1 Routers.

  • What are the benefits of using a dedicated leased line?

    The primary advantage of a business using a dedicated leased line is that it does not share its internet connection. As a result, dedicated leased line users enjoy fixed bandwidth without fluctuations.

Was this page helpful?