Broadband Guide
Hidden Costs of Broadband
Updated: Monday 13 February, 2012
By Editorial - news@consumerchoices.co.uk
Broadband providers have brought their headline prices to an all-time low, and everywhere you look you’re surrounded by special offers.
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.
Paying for “freebies”
A short time ago, free laptops were the hot give-away item, however such offers are less common now. 3 (www.Three.co.uk) is one of the few providers still offering a free laptop with some of their packages. But of course there’s a catch; these deals come with mammoth 24 month contracts. And although the deals do advertise “free” laptops, you essentially pay for your new computer over the course of your contract through higher monthly payments.
Download penalties and fair usage
When it comes to downloads, broadband packages come in three varieties; ones with set, published limits, ones that are advertised as “unlimited broadband” but are subject to a fair usage policy, and those that are genuinely unlimited. The first two can end up costing you more than your basic package fee, or result in a throttled connection speed.
Over the past couple of years, the way we use the internet has changed dramatically with people downloading TV shows using services such as the BBC iPlayer and downloading high definition, DVD-quality movies - and as your habits change, you could find yourself paying the kind of fees seen below:
- BT broadband (www.BT.com) charges £5 per 5GB if you exceed your 10GB or 40GB allowance
- Plusnet broadband (www.Plus.net) also charges £5 per 5GB if you exceed your 10GB or 60GB allowance
But beware of the “unlimited broadband” packages that 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 Broadband (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 if you regularly exceed your limit, 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 Broadband (www.TalkTalk.co.uk) and Sky Broadband (www.Sky.com) 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 money that they can then pass on to customers in the form of lower headline rates or free broadband and inclusive 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 £60 or more if you want to move away from LLU but can’t migrate seamlessly
- Varying costs of up to £130 to have your line returned to the BT network.
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 are likely to have no choice but to call at some point - could be more expensive. 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 £10 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 Broadband (www.O2.co.uk), which offers UK-based technical support for free.
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” or short contract broadband packages such as those offered by O2 broadband (www.O2.co.uk) and Plusnet (www.Plus.net), who charge £30.63 and £25 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.For example, Direct Save Telecom charges a £50 exit fee if you 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 Ombudsman Services: Communications, the telecommunications industry’s watchdog, or Ofcom. If you want legal advice, try the Which? Legal Service, for over-the-phone advice at £85 for a year (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 will offer you a free modem, but will then charge you for postage, and you could 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 around £50 a year 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 copper wire ADSL customers will have to pay in order to connect to the internet.
However, there are now a couple of ways around paying the £14.60 monthly line rental fees to BT for a line you might only be using for your broadband connection.
Mobile broadband from providers such as T-Mobile Mobile Broadband (www.T-Mobile.co.uk) and 3 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 or 7.2Mb.
However, you need to make sure that you check the mobile broadband coverage in your area before signing up as it can be patchy in rural areas. You also need to 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 standalone cable broadband package too.
Some ADSL providers also offer their own line rental, which can sometimes cut costs.
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 offering packages where you can pay by cash or cheque in your local Post Office without an extra fee. Most companies only give you the option of paying via direct debit, however other providers might charge a premium if you want to pay any other way.
You might also have to pay a surcharge if you want to receive paper bills.
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, BT or Virgin Media.
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