Leased Line Definition

A leased line is a dedicated telephone connection between two points that is set up for a company or other organization by a telecommunications common carrier.

In contrast to conventional dial-up connections, leased lines are always active. And because they do not carry anyone else's communications, the carrier can assure a given level of quality. Leased lines do not have a telephone number, as each side of the line is permanently connected to the other.

Users of leased lines are typically charged a fixed monthly fee. It is typically determined by the capacity of the line and the distance between its end points.

A leased line can be used for a single high-speed data circuit, or it can be multiplexed (i.e., divided into multiple circuits) for any desired combination of data and voice communication.

Leased lines are most often employed by businesses to connect geographically distant offices. However, they are increasingly being used by companies, and even by individuals, for Internet access because of their high data transfer rates and cost-effectiveness if the Internet is used heavily.

T-1 lines, which have a maximum transmission speed of 1.544 Mbps, are commonly used as leased lines.

Created October 17, 2005.
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