Broadband Guide

Hidden Costs of Broadband

Broadband providers have brought their headline prices to an all-time low, and everywhere you look you’re surrounded by offers of free broadband and free line rental - you can even get free laptops and games consoles when you sign up to one of a new breed of super-long broadband contracts.

But if you’re not careful, you could end up paying far more than expected through increased call charges, data limits and other hidden charges. Compare UK Broadband Packages.

Paying for “freebies”

Providers such as AOL (www.AOL.co.uk) and 3 (www.Three.co.uk), with its mobile broadband, are giving away laptops and even Sony PlayStation 3s to on AOL’s Wireless Plus package. But of course there’s a catch; the AOL package comes with a mammoth 24-month contract, at £19.99 a month, and while mobile broadband means you can forgo line rental and connect wherever you are, 3’s package, on an 24-month contract still costs at least £30 a month.

This means that you could end up paying for your “freebie” many times over, and the length of these contracts also means that you’ll miss out on further cost reductions and improvements in download speed and allowances as the market moves on while you stay tied to an outdated contract for another 12 months.

Download penalties and fair usage

when it comes to downloads, broadband packages can be split into two piles; ones with set, published limits, and ones that are advertised as “unlimited” but are subject to a fair usage policy. And both can end up costing you extra, or throttling the speed of your connection.

Over the past year, the way we use the internet has changed dramatically with people downloading TV shows via legal peer-to-peer services such as the BBC iPlayer and even downloading high definition, DVD-quality movies - and as your habits change, you could find yourself paying the kind of fees seen below:

Eclipse Home Lite, Select and Pro (www.Eclipse.net.uk) - 2GB, 10GB and 50GB limits, £1.25 per GB over limit
Madasafish Max, Max Plus and Max Premier (www.Madasafish.com) - 5GB, 20GB and 50GB limits, £2.00 per GB over limit

But even “unlimited” packages have hidden download limits in the form of fair usage policies. These are put in place by your ISP to ensure that your downloading doesn’t affect other people’s connections, and it’s customers on these packages that are most likely to have their connections throttled to slow them down.

In accordance with their fair usage policy, many ISPs, including the biggest providers BT (www.BT.com) and Virgin Media (www.VirginMedia.com), can slow down your connection to limit your downloads and even upgrade your broadband to a more appropriate and more expensive package, so you will have to pay a higher upfront fee every month.

Use our free Broadband Download Monitor to keep track of your downloading.

The cost of unbundling

Many of the cheap broadband providers, such as TalkTalk (www.TalkTalk.co.uk) and Tiscali (www.Tiscali.co.uk) keep their costs down by connecting customers to their own local loop unbundled (LLU) networks.

LLU allows providers to install their own equipment in the local exchange, bypassing BT altogether and saving them money that they can then pass on to you in the form of lower headline rates or free broadband and free line rental.

However, if you find that you’re not happy with your LLU provider, or simply find a better deal elsewhere, you could end up forking a lot of money to migrate.

Cease and re-provide cost of £58.75 if you want to move away from LLU but can’t migrate seamlessly
Up to £124.99 to be returned to the BT network if you’ve been moved to a fully unbundled line, or if you want to move from Virgin Media’s cable network onto an ADSL line

Moving house

Some providers will charge a cease and re-provide fee if you want to move house, but keep your broadband - even if your contract hasn’t yet expired. Make sure you read the small print, as some will also make you sign a new contract with them when you move house - which could keep you tied into an outdated contract for another 18-months.

Call centres

As the broadband market has become increasingly competitive, providers have lowered headline rates, only to bump up the cost of calling essential technical support lines and customer services.

Make sure that you check the cost of calling sales, customer services and technical support lines - some providers offer a free or local rate number for sales and customer services, but technical support - which you’ll have no choice but to call at some point - could be a premium rate number. If you think you’re likely to need a lot of technical support, make sure that call cost is one of your priorities when looking for a new provider.

For example, 10 calls to a helpline, for 10 minutes each time, at 10p a minute, will add another £15 to your bill - a charge for advice that some companies give out for next to nothing, or even for free if you’re with O2 (www.O2.co.uk), which offers UK-based technical support for free.

Here are some of the rates you might expect to pay for technical support with other ISPs:

Tesco (www.Tesco.net) - 50p a minute
Orange (www.Orange.co.uk) - 50p a minute
Virgin Media dial-up (www.VirginMedia.com) - 50p per minute, with a 10p connection fee

Take a look at our Broadband Comparison Calculator and click on the package name for a full breakdown of charges and call centre opening hours.

Connection and cancellation charges

All ADSL providers have to pay BT to connect you, but many will regain this cost through your monthly payments over the course of the next 12, 18 or even 24 months. However, some of the cheaper packages will still charge a connection or set-up fee when you join.

This is also often the case with “no-contract” broadband packages such as those offered by Direct Save Telecom (www.DirectSaveTelecom.co.uk), and Plusnet (www.Plus.net), who charge £29.95 and £40 connection fees respectively.

If you’ve found a “no contract” broadband package that has no connection fee, make sure that you read the small print, as you’ll probably be charged an exit fee instead. Namesco (www.Names.co.uk) and EFH Broadband (www.EFHbroadband.com) both charge exit fees if customers leave within 12 months.

Click here to read more about No contract broadband packages.

However, if you want to cancel because of poor service, you could contact us, or get in touch with Otelo, the telecommunications industry’s watchdog, or Ofcom. If you want legal advice, try the Which? Legal Service, for over-the-phone advice at only £25 for six months (see useful links).

Hardware

Most ISPs will provide a free modem when you take up a broadband contract, but depending on your needs, you might end up paying for other hardware like a wireless router so that multiple computers can use the same internet connection without running cables all over the house.

Also remember that some ISPs, like Eclipse, will offer you a free modem, but will then charge you for postage, and you’ll have to pay around £14.99 for delivery of any “free” laptop or games console you get with your new broadband package.

Click here to read more about Wireless broadband.

Securing your PCs

Not all ISPs provide security as part of their broadband packages, but good anti virus software and a firewall are essential. Without them, you could be exposed to virus attacks, bank fraud and identity theft.

Some broadband packages do come with free virus protection, while others will offer only a trial version. If you don’t get free protection with your monthly subscription, market leaders Norton (www.Symantec.com) and McAfee (www.McAfee.com) charge £59.99 each for full internet security.

But there are also free options for protecting your PC. For instance, modern Windows packages include a free firewall that’s quick and easy to set up. Avast also offers free protection software.

Line rental

Headline rates don’t include the line rental that almost all ADSL customers will have to pay in order to connect to the internet.

However, there are now a couple of ways around paying £10.50 a month to BT for a line you might only be using for your broadband connection.

Mobile broadband from providers such as T-Mobile (www.T-Mobile.co.uk) and 3 (www.Three.co.uk) allow you to cut out your line rental completely. For your set monthly fee you’ll receive a dongle or USB modem stick that you plug into your laptop, allowing you to connect to the internet - no matter where you are - at speeds of up to 3.6Mb. Just make sure that you check the mobile broadband coverage in your area before signing up as it can be a little patchy in rural areas and keep an eye on your downloads as mobile broadband packages have far lower allowances than traditional home broadband connections.

Otherwise, cable company Virgin Media doesn’t use the BT copper wire network, so you could get a package without taking their phone line too. And Tiscali even offers “free line rental” to customers within its LLU network.

Some ADSL providers such as Toucan (www.Toucan.com) also offer their own line rental, which can cut costs. Toucan’s line rental is only £8.99 a month.

The way you pay

If you don't want to pay by direct debit, then expect some additional monthly charges. The Post Office (www.PostOffice.co.uk) has made a positive move by launching packages where you can pay by cash or cheque in your local Post Office without being charged extra. Most companies only give you the option of paying via direct debit, however other providers charge a premium if you want to pay any other way:

BT Broadband - £4.50 quarterly fee if you pay by cash or cheque
Virgin Media - £5.00 a month if you pay by cash or cheque

Remember

Best value doesn’t always mean cheapest. Look beyond the price and get a package that really suits you, thinking about your needs as a user. for example, if you’re a technophobe, you could benefit from packages that offer cheaper support and free security.

You should also think about whether or not you could save even more by bundling your home communication and entertainment services. If you take your phone line, broadband and digital TV from three different providers, the chances are that you could save money and get a better service by taking a bundle from Sky Broadband (www.Sky.com), Tiscali or Virgin Media.