Compare the whole circuit decision, not just the monthly fee
A dedicated circuit can look expensive beside a single business-internet quote, but monthly access fees are only one part of the decision.
Installation, customer-premises equipment, exit and transition work, post-contract pricing, lost contribution during outages, recovery labor, and SLA service credits must share one three- or five-year boundary.
A backup circuit is not automatically economical either when observed downtime is small, the business can keep operating, or both lines share a common failure point.
Dedicated line
Model one dedicated-circuit quote and its observed outage evidence.
Business internet
Model one business-internet circuit without backup connectivity.
Internet plus backup
Model combined primary and backup cost, failover interruption, and common-mode downtime.
Jurisdiction and evidence boundary
Korean carrier product pages were reviewed on August 17, 2026 to confirm that SLA credits, diverse paths, protection switching, quote pricing, contract terms, and early-termination charges are separate contract inputs.
The calculation itself is currency-neutral and the English defaults are independent fictional USD examples.
It embeds no Korean or global market price, outage rate, recommended availability, or automatic interpretation of any carrier agreement.
Normalize the quote and business-impact inputs
A low TCO is not a like-for-like price advantage when taxes, bandwidth, equipment, support hours, monitoring, or installation scope differ.
Align those boundaries first, then replace the fictional defaults with written quotes, current SLA schedules, invoices, and 12 to 36 months of outage evidence.
Service hours per year
Use 8,760 for a 24-by-365 comparison only when the contract uses that measurement window; otherwise enter the contract denominator.
Contribution loss per hour
Enter contribution that is not recovered after an outage rather than gross revenue flowing through the circuit.
Recovery and idle labor
Add emergency recovery and idle-workforce cost only when those amounts are not already included in the contribution-loss figure.
Current and post-contract fee
Separate the quoted contract rate from the renewal assumption used after the term; zero post-contract fee carries the current rate forward.
Outage hours and event count
Use annual outage hours for the single-line loss model and event count to turn tested failover minutes into redundant-service interruption.
SLA-eligible monthly fee
Enter only the charge base covered by the service-credit clause rather than the entire invoice by default.
The formulas behind SLA credit, downtime, and TCO
SLA arithmetic allowance
service hours × (1 − availability ÷ 100)
Across 8,760 hours, 99.9% converts to 8.76 hours and 99.99% converts to 0.876 hours.
This is a comparison metric, not a prediction that the circuit will be down for that duration and not proof that a credit is owed.
Redundant effective downtime
min(primary outage hours, events × failover minutes ÷ 60) + common-mode hours
Detection, route change, session recovery, and application reconnect can interrupt service even when a backup line works.
Shared conduit, power, equipment, upstream network, DNS, identity, or operating procedure can also stop both lines, so common-mode time stays explicit.
Expected annual SLA service credit
eligible monthly fee × min(per-event rate × qualifying events, annual cap) ÷ 100
A 10% per-event rate with two qualifying events and a 50% annual cap applies 20% of the eligible monthly fee.
The calculator does not decide whether an event satisfies exclusions, notice, duration, measurement, or filing requirements.
Three- or five-year expected TCO
setup + transition + horizon monthly fees + downtime loss − SLA credits
Current monthly fees apply through the stated contract term and the entered post-contract fee applies afterward.
Monthly direct cost per Mbps is a normalization aid only and does not monetize latency, jitter, packet loss, support, security, or path quality.
A practical step-by-step workflow
- Define the interrupted business boundary. Identify which sales, production, payment, clinical, logistics, or office workflows actually stop when the circuit fails.
- Normalize all three quotes. Align bandwidth, fixed addresses, CPE, construction, monitoring, field support, tax, and support-hour scope.
- Enter the contract cash flow. Copy setup, monthly, post-contract, term, exit, and transition amounts from written documents.
- Separate SLA from outage evidence. Put contractual availability in the SLA field and observed or scenario-based hours in the outage field.
- Document the service-credit formula. Confirm the eligible fee, per-event percentage, expected qualifying event count, and annual cap.
- Test redundancy. Enter measured detection-to-recovery minutes and a separately supported common-mode outage estimate.
- Read both horizons. Review direct cost, outage loss, credit, post-contract pricing, warnings, and winner changes between three and five years.
- Use the break-even and RFP tables. Compare the threshold with the company’s hourly impact and ask every carrier the same path, credit, recovery, and evidence questions.
Reading the deterministic worked example
The following currency-neutral vector verifies the calculation structure and is not a Korean, U.S., or international market-price example.
Contribution loss is 100 per hour and recovery labor is 20, creating a total outage impact of 120 per hour.
Dedicated downtime is one hour per year, business-internet downtime is ten hours, and redundancy converts four incidents at 15 minutes each plus 0.5 common-mode hours into 1.5 effective hours per year.
Worked three- and five-year circuit TCO vector| Option | Annual downtime | Annual SLA credit | 3-year TCO | 5-year TCO |
|---|
| Dedicated line | 1.0 hour | 10 | 4,930 | 7,550 |
| Business internet | 10.0 hours | 5 | 5,485 | 9,075 |
| ★ Internet plus backup | 1.5 hours | 5 | 3,705 | 5,975 |
The three-year redundancy threshold is about 50.20 per outage hour and the five-year threshold is about 47.06.
The entered hourly impact of 120 exceeds both thresholds, so avoided outage loss outweighs the additional net contract cost under this vector.
That result does not claim that the redundant design is technically more reliable than every dedicated circuit; it compares redundancy with the lowest net-contract-cost single-line reference.
Why an SLA credit does not repay the whole business loss
Service credit and economic loss are separate
A carrier service credit can depend on eligible access charges, a measurement boundary, minimum duration, exclusions, notice, claim timing, and a cap.
It may not reimburse lost contribution, reputation, customer support, idle payroll, or emergency recovery work.
Keep incident ticket numbers, start and end timestamps, carrier-versus-customer equipment boundaries, escalation records, and claim deadlines beside the model.
- Confirm whether the denominator is calendar time, scheduled service time, or another measurement window.
- Identify maintenance, customer equipment, power, force-majeure, third-party construction, and security-event exclusions.
- Check whether multiple short interruptions form one incident and whether a minimum continuous duration applies.
- Confirm whether the credit base is access service only or includes equipment, options, and taxes.
- Determine whether credit is automatic or must be requested by a deadline and whether it is cash or a future invoice credit.
A second circuit can still share a single point of failure
Buying service from two carriers does not by itself create end-to-end diversity.
Building entrance conduit, telecom-room power, upstream facilities, routers, firewalls, DNS, identity, cloud gateways, and manual operating procedures can remain common dependencies.
The common-mode downtime field keeps that residual risk visible rather than assuming perfect independence.
Physical route
Confirm outside-plant route and building entrance diversity with drawings and site inspection.
Carrier and facility
Ask whether upstream facilities and leased segments differ, not only whether provider names differ.
Power and equipment
Review modems, routers, firewalls, switches, UPS units, and maintenance domains for shared failure.
Automatic transition
Test detection, sessions, DNS TTL, VPN reconnection, health checks, and restoration with real business traffic.
Backup capacity
Prioritize payment, voice, VPN, and critical SaaS traffic when LTE or a lower-speed circuit cannot carry every workload.
Operating evidence
Retain quarterly failover exercises, monitoring timelines, tickets, and corrective actions for the next renewal.
Questions to place in every carrier RFP
Carrier RFP checklist for circuit TCO and SLA comparison| Scope | Values to obtain | Comparison question |
|---|
| Price and term | Setup, equipment, monthly, discount, tax, renewal, and early-exit amounts | What happens to equivalent scope and price after the initial term |
| Bandwidth and quality | Upstream, downstream, committed, minimum, maximum, latency, jitter, and loss | Where are measurements taken and which segments or equipment are excluded |
| SLA | Availability, window, exclusions, minimum duration, notice, and claim process | Which fee base, per-event rate, and annual cap apply |
| Recovery and support | Monitoring, intake, response, field dispatch, restoration target, and escalation | How does response time differ from service restoration time |
| Diversity | Carrier, facility, conduit, entrance, power, CPE, and routing separation | Which common failure points remain and who owns failover testing |
| Evidence and exit | Incident report, performance report, diagram, log retention, and termination support | What evidence supports outage duration, root cause, and credit calculation |
Practical scenarios and interpretation limits
Online commerce or booking
Use unrecovered order contribution and incremental support cost rather than all sales that passed during the outage window.
Clinic or professional office
Limit the model to reception, claims, imaging, communications, and other workflows that actually depend on the circuit.
Factory or warehouse
Separate stopped production or shipping from work that continues and test whether backup bandwidth carries critical MES, WMS, and label traffic.
Multi-site business
Model simultaneous-failure boundaries and site-specific contribution instead of multiplying one generic outage cost across every branch.
General office
Subtract work that can continue through mobile access or offline procedures and include only measured idle or emergency-support time.
Data center or cloud access
Review routing, firewalls, cross-connects, gateways, and application-level availability outside this circuit-cost model.
- The model embeds no market price, universal outage rate, credit rate, or recommended carrier.
- It does not decide SLA breach, claim eligibility, damages, legal interpretation, tax, or accounting treatment.
- It repeats an annual expected-hours scenario and does not model outage probability distributions or correlation through Monte Carlo simulation.
- Equal bandwidth does not mean equal latency, jitter, packet loss, routing, security, monitoring, or support quality.
- Avoid double counting labor already included in contribution and revenue that is recovered after service restoration.
- Repeat conservative, base, and optimistic outage, hourly-impact, failover, and renewal-price cases before approval.
Frequently asked questions
Should 0.876 hours be entered as expected downtime for a 99.99% SLA?
No.
The 0.876-hour figure is an arithmetic conversion across 8,760 hours, while expected outage hours must come from logs, monitoring, tests, and an architecture-specific scenario.
What should I do when the service-credit formula is unknown?
Set the eligible fee, event rate, qualifying events, and cap to zero for a conservative no-credit case.
Then confirm the current contract schedule and save a separate scenario with supported values.
Can LTE be used as the backup option?
Yes.
Include router, data plan, management, tested failover, usable critical-workload bandwidth, radio coverage, and shared site-power risk.
What does the redundancy break-even hourly loss mean?
It divides additional net contract cost by the outage hours saved against the lowest-net-contract-cost single-line reference.
An actual hourly impact above the threshold supports redundancy under the inputs but does not prove technical independence.
Why does the five-year result need a post-contract fee?
A three-year quote may not guarantee pricing in years four and five.
Enter the supported renewal amount or stress a higher value rather than silently extending the original discount.
Can the lowest-TCO option be selected immediately?
No.
Path diversity, performance, security, support, recovery process, carrier stability, and contract risk require RFP, technical, and legal review outside this cost result.
Primary sources and recheck date
The source boundary was reviewed on August 17, 2026.
LG U+ product materials support the separation of dedicated service, SLA compensation, diverse transmission paths, protection switching, monitoring, and quote-based price.
SK Broadband product materials support the separation of speed-based quote, protection switching, three-year term, and possible early-termination discount repayment.
NIST HB 135e2025 supports a common lifecycle-cost boundary, while NIST SP 800-34 Rev. 1 supports keeping business impact, recovery strategy, and exercise evidence distinct.
Product pages do not replace the current agreement issued to a specific customer, site, and service.
Recheck written quotes, SLA schedules, invoices, outage records, network diagrams, and failover tests at every renewal.
Rebuild the comparison with one RFP and real outage evidence
Send every carrier the same bandwidth, support, tax, diversity, SLA, and evidence questions, then enter the current written responses.
Recheck three- and five-year results with observed incidents and tested failover so a low monthly fee does not hide outage loss and an expensive backup design does not escape scrutiny.