Choosing broadband plans

Broadband plans look attractive but there can be nasty catches.

Revised 23 May, 2004

For most people, broadband Internet is now cheaper than dial up. Broadband plans are a little more a month than equivalent dial up plans. Once the cost of calls and line rentals are included, broadband is usually cheaper.

Broadband does have some risks. It is possible to ring up a substantial bill on a dial up Internet account, but the potential for a massive broadband bill is much greater. A broadband user is also a much more tempting target to a hacker or virus writer.

To complicate things further, there are far more choices in broadband plans. Some of the cheaper ones seem to have been structured with the aim of fooling users into big bills. The most common way to get a big bill is through exceeding the "free" data allowance.

Data Allowances

Every time you go on the net, you transfer data. Every connection, every email and every web page involves data moving between your computer and the net. A typical light Internet user can expect to use around 400Mb a month.

Most broadband Internet plans include a data allowance. If you go over that allowance you will either be capped or start paying excess fees. Generally these fees vary between 15 and 20c per Mb.

The cheapest plans generally offer a 200Mb allowance. The Telstra $29.95 plan charges 15c for each additional Mb. A typical 400Mb user would end up with a monthly bill of around sixty dollars. For sixty dollars a month, you can get a much better plan with Telstra or one of their competitors.

Remember these assumptions are based upon a light user. If you have teenagers, or you like listening or watching streaming media your usage will be much higher. To help you figure out how much data you will use, Telstra have a usage calculator, use this to figure how much data you can expect to use then double the amount to be safe.

Capping

One way to avoid huge bills to choose a plan that caps your usage when you go over the monthly limit. Most broadband providers offer these plans. One thing to watch is the speed when you exceed these plans. The speed of a capped Optus cable connection will make you cry.

While speed caps protect against massive bills, they are frustrating. It's best to choose a plan with a generous allowance that means you won't get frustrated. Remember you will use double what you expect.

Speeds

For cable users speed isn't an issue, they get whatever the local network supports, unless they've been capped. For ADSL and satellite customers, you can choose what upload and download speeds you want. Naturally the faster you choose, the more you pay.

This is another area where the unsuspecting consumer needs to be careful. Many of the cheap plans are the slowest available. The slowest speed is 256/64, which means the download speed is around six times faster than a dial up modem, while the upload speed is only a little faster.

When comparing plans, it's important to make sure plans are of a similar speed. Faster is definately better.

Pre Selection

Contract Lengths

The longer you committ to, the cheaper the price so most of the cheaper plans have long contracts. As the current price wars show, broadband prices are dropping all the time. Getting locked into a two year contract may not be a good deal.

Installation

A number of providers are offering free installation. Read the fine print as this offer may only apply if you sign up to a longer contract or more expensive plan. For the average user, we’d recommend getting the ISP to send a tech out to install it for you, even if you have to pay an extra $200.

Free Months

Some providers are offering a number of ‘free" months. Like the "free" installation offers these may be linked to extended contract lengths or not be available on the cheaper or more flexible plans. Read the fine print.

Free equipment

Another "freebie" to get you in. All broadband connections require a special modem. For cable connections this is included as part of your plan. ADSL customers can supply their own modems.

Most ADSL providers will sell you a modem as an extra. While they tend to be more expensive than buying your own, we recommend buying their modem as it becomes more difficult for the ISP to play the traditional blame shifting game if anything goes wrong. This usually adds around $200 to the setup cost.

Like the other "free offers" a free modem may cost you more over the length of the contract. Read that fine print.

Comparing providers

Telstra Bigpond is not the only provider. ADSL is a very competitive market and there are a lot of providers offering good deals. Broadband Choice is the site to visit when you want to find who can offer the best broadband deals.

While broadband is the best way to connect to the net broadband Internet plans are complex and can catch the unwary. Make sure you understand what you are getting into before you sign a contract. Shop around to find the best deal for you and remember that if it is too good to be true, it may well be.