The Internet network structure
Lying at the heart of the Internet is the wonderful old telephone network. The network may have appeared in the last 110 years, but its low-cost and immediate communication link to so many people all over the world has made it one of the most vitally important piece of technology humanity has ever devised (the others being fire, the wheel, and the radio).
What's the problem with the telephone network?
The telephone network does have a problem of its own thanks to the Internet. The shear volume of users trying to get online and the type of digital information being sent and received (i.e. now with increasingly detailed detailed sounds and pictures) have revealed inadequacies in the network known as 'bottlenecks" (or regions of 'limited bandwidth').
'Bottlenecks' are regions where the capacity of a communication line to transmit large volumes of data is limited. Bottlenecks tend to be found in links between high population centres and where traditional copper telephone lines are used instead of the high-data volume capacity of fibre-optic cables.
The problem of not having sufficient data capacity is actually so serious in some parts of the current telephone network that communication giants like Telstra are spending billions of dollars on upgrading the network using new digital fibre-optic cables called ISDN (1). Even some of the more financially-successful and rather large ISP groups like Access One, CompuServe Pacific and SPT have developed their own independent networks to bypass some of the main 'limited bandwidth' trouble-spots.
The problem of limited bandwidth is not restricted to the telephone network. More and more ISPs are signing up too many new Internet users, creating a bottleneck at the ISP end because of insufficient modems and inadequate telephone lines to handle the numbers during peak times.
ISPs have to get their own houses in order before taking on new users.
The Australian telecommunications giant Telstra is a classic example of what can happen when too many users sign up to Telstra's Bigpond Internet Service and try to get on the Internet almost simultaneously (further exacerbated by the likelihood that an alleged swen virus infected the Telstra mail server and therefore sent an extra 20 per cent more junk emails to people's email accounts). It seems Telstra has managed to sign up nearly 1.5 million customers to its Bigpond Internet Service. Not realising the impact of so many people each having potentially dozens or even hundreds of mostly junk email messages to be stored and managed, the Telstra servers couldn't handle the overload. As a result, Telstra was forced offline for 9 days until their systems could be updated and bug-free.
On the positive side, Telstra has admitted there was a problem (although the company would prefer to blame the fault on the virus and a bug-ridden software upgrade to a mail server rather than a combination of the virus, sales tactics, numbers of customers, poor software, and an antiquated server system for delivering the Internet service). Rebates for affected Telstra customers will cost the company many millions of dollars.
What's been done about the "limited bandwidth" problem?
The battle for more bandwidth is on. Dr Mark Harwood, business manager of Media and Satellite at Optus Corporation, believes that satellite links, rather than fibre-coax rollouts, will be essential in providing high bandwidth to heavy Web users in Australia.
Telstra is currently concentrating on ISDN, ADSL, Asynchronous Transfer Mode (ATM) and fibre-coax networks as the main solution for its 'Big Pond' marketing drive for Internet users. Optus, on the other hand, is announcing plans to establish a digital satellite link for Internet users in late 1997. (2)
As of mid-1997, Telstra has already spent $4 billion to run the high-speed Big Pond Cable past four million homes in Australia. The number of customers that have signed up for Big Pond Cable was in the 'hundreds' according to Phil Sykes, general manager of Broadband Product Development at Telstra Multimedia. (3)
World Wide Web or the World Wide Wait! Good bandwidth is seen as critical to a successful Internet experience.
There is an interesting trend at the moment whereby some companies like Intel are trying to get consumers to buy the very latest computers and/or modems by saying they make for a faster Internet experience. This is not necessarily true. No microprocessor faster than say 100MHz will improve the download times of web pages you access on the Internet. Neither will a superfast modem device improve the situation, especially if your local ISP uses modems that are slower than your own. And even if the modems of the ISP are just as fast or faster than your own modem, web pages can only be downloaded as fast as the communication links (i.e. the telephone line) will allow them.
Therefore, do not be fooled into thinking that you have to buy the latest computer technology if the only thing you want to do is access the Internet.
Who is managing the network upgrade process?
With a large number of ISPs and telephone companies doing their own network improvements, just who is overseeing the entire network upgrade process? Are the improvements really helping everyone or just a few people?
President of the Internet Engineering Task Force involved in establishing the Internet technical standards, Mr Fred Baker, said:
"The Internet isn't going to fall apart. We're just in a state of transition to a faster, more stable network." (4)
Nevertheless, the ISP industry is highly fragmented and there is talk of consolidating the world's free market of ISP groups into one main governing body. Such a governing body could work with government and all major telephone and computer companies to ensure a high quality delivery of the information over the entire network (not to mention bringing in standard billing rates) without affecting the diversity of services available on it. As Mr Bob Metcalfe, a pioneer in the networking industry, said:
"The current management vacuum [in the ISP industry] creates the possibility for monopolies to step in and take over. One...would be the government, God forbid. Another...is the telephone companies. That would be death. They're slow to innovate and they charge an arm and a leg. The third kind would be Microsoft, and we don't want them running the Internet." (5)
But no matter what networking problems still exist, as Mr Peter Ford of Microsoft's Internet working group once said:
"The beauty of the Internet is that we'll always have options." (6)
Is Telstra taking control of the networks?
Perhaps as part of an attempt to fill in this management vacuum in the network upgrade process, Telstra in Australia is flexing its muscles with the sole aim of becoming the dominant ISP.
With so many billions of dollars already invested in the unregulated network and in creating new broadband services, Telstra has now realised how important it is to make a return from its investment. But, according to Telstra estimates, it will take about 25 years to recover the costs and start making a profit. This means Telstra has to monopolise the network, attract enough customers to its network, and raise Internet fees to customers.
And there is even some suggestions of anti-competitive behaviours been shown towards other Internet service providers.
For example, people are already seeing a massive hike in the cost of Telstra's Internet access services; and many telecommunication companies like Optus and Transact Communications are experiencing strong anti-competitive behaviour from the big company. According to the article entitled Schools' Internet fees skyrocket in The Canberra Times dated 9 February 2002:
"Telstra is again under fire for greedy behaviour with the Opposition criticising the telecommunication giant's plan to charge schools thousands of dollars a year more for Internet access.
Labor's communications spokesman Lindsay Tanner said Telstra wrote to Victorian EduNet schools advising them of large increases in Internet subscription fees.
"Small schools paying $200 per year had their fees raised on an interim basis to an annualised amount well over $2000," Mr Tanner said. "Medium schools went up from $700 to over $4000 and the largest schools went from $1120 to over $5000.
"A slight reduction in the per megabyte usage rate will only slightly diminish the overall impact of these enormous fee increases."
The Internet fee rises come hot on the heels of Telstra's plans to axe its cut-price Easy-mail email service and charge businesses $126.50 a year to remain listed in the residential White Pages.
"Telstra are engaging in systematic price rises across the company in a naked grab for profits above people," Mr Tanner said.
"They are privitising from within to fatten the company up for further sale."" (7)
Schools are not the only entities to be hit hard by the price hike from Telstra. Paul Heymans of Fernvale in Queensland is a regular Telstra user of its "BigPond" (or should it be "BigBill") Internet services. In a letter to the editor of Australian Personal Computer (APC) in April 2002, page 24:
"I've just received an email from Telstra informing me that I must sign up for a 12-month contract or pay an extra $4 per month for my BigPond account. What a nerve! I'm not taking this from Telstra and I hope your readers will not put up with it either. One of the things that keeps ISPs up to scratch is our ability to hop to another service provider. If enough customers hop to another provider, Telstra will have to think again."
And then there's the quote from John Tomasin of Mill Park in Victoria, writing to the same magazine in April 2002, page 24:
"Telstra has just increased the price of our BigPond cable account by $27.65 per month. My children depend on broadband to access homework on their school's intranet. Without it, they would be severely disadvantaged. We currently pay $60.30 per month (and that's with discounts for being loyal customers) on the so-called Freedom plan, which was recently capped at 3GB. Now we are expected to pay $87.95 for the same plan. Telstra seems to be squeezing us simply because we have nowhere else to go. The ACCC should be doing all it can to protect consumers from this kind of monopoly situation."
Why the sudden price hike by Telstra? According to Stuart Gray of Corporate Affairs in Telstra, the reason has to do with the idea of "commercial viability" when providing Internet services to customers.
In the previous Internet access model provided by Telstra prior to 2002, consumers paid a fixed-rate plan for any amount of time and information download they required. The "commercially unviable" part of it comes when the really heavy Internet users hog the network and reduce the amount of time and network capacity away from other users. To make it more equitable, Telstra has introduced a "pay for what you need" model where heavy users pay in proportion to the amount of time and information they download (or instead be capped at say 3GB of information per month), or else move to the new broadband plan structure for at least double the cost and that will result in a more fairer system for everybody.
Well, that's the official explanation Telstra wants to give to the public for helping the company maintain its monopoly on the network and so raise the costs for Internet access.
Or perhaps the real reason is because a new national alliance of up to 20 power utility companies known as Utilitytel has been formed in February 2002 by telecommunications expert Paul Buddhe to help break Telstra's monopoly over broadband and telephone services in Australia.
The aim of Utilitytel - which includes companies like CitiPower, Energy Australia, SPI Powernet, Energex, Powercor, PowerTel, Optus and Transact Communications - is to exploit the untapped opportunity to build a national broadband network for residential and corporate users and then to turn this into a separate national telephony system as a way of by-passing Telstra's own network.
Already Transact Communications is leading Australia and the world in building a model broadband network system for the residents of Canberra and this will be used as the basis for further network rollout plans in all the other major Australian capital cities.
Some members of the alliance are optimistic they can provide a total network rollout plan and start making a profit by 2005, which would seriously affect Telstra's aims at recovering costs within 25 years.
If this is true, the general public and a number of corporate users can expect some real competition for Internet access after 2005. In the meantime, expect Telstra to significantly raise the cost of Internet access for all users as they milk the consumer dollar for all they can get.
Telstra improves costing structure for low income families
As of 23 April 2002, Telstra has introduced what management calls a rebalancing program for low income families worth A$150 million. The program is designed to shield low income families (representing about 10 per cent of all Telstra users) from the sudden price hike in Telstra services.
Welcomed by many Australian social welfare groups, Telstra will provide assistance to low income families in such areas as free MessageBank (a voice message recording service), low Internet access costs, and a special plan to help people spread the costs via instalments rather than a full payment of the Telstra bill within 28 days of receiving the bill in the post.
As for the remaining 90 per cent of customers who have an account with Telstra, they will have to bear the brunt of high Telstra charges by way of increases in residential line rental costs, Internet access and other services at least for the next few years, or move to another service provider (if there are any left!).
Telstra's standard Internet network is starting to suffer
People with standard 56k modems who joined Telstra's A$25 per month Internet plan are now experiencing regular disconnections (especially for those outside of major cities) as the number of Internet users put pressure on Telstra's servers. There are also rumours that regular disconnection is a good thing for Telstra as this helps to raise more revenue through the standard telephone call rates.
And some critics argue this is Telstra's idea of giving customers the incentive to move to the new broadband network plan for nearly A$60 per month.
Whether this is true or not, we welcome Telstra's official response to these rumours so that we can reflect a more accurate picture of what is happening today in the Internet world within Australia.
Telstra problems with BigPond and telephone services in the bush are suffering
Because Telstra is hot on the heels of cost recovery through rigorous advertising of BigPond and other Telstra services after their major spend in the city areas for better networks, the shear number of Telstra customers now trying to benefit from the services are experiencing network problems such as unexpected disconnections, failed email message delivery to Telstra BigPond accounts, and difficulty in making telephone calls from the bush.
Yet the Telstra boss is saying to the media that services in the bush and elsewhere is as good as it can ever be! Well, while most people can't make a proper call to Telstra about the service problems, it is no wonder Telstra cannot hear what customers are complaining about.
In all fairness, Telstra is trying their hardest to expand network capacity without spending too much money on major new network infrastructure.
In particular, the introduction of the new high-speed broadband connection service by Telstra (although a little expensive to have for the average home user) is a significant quantum leap in the delivery of voice and data information through the existing telephone network.
Telstra increases cost to use copper wires for Internet and telephone use
Since 2003, Telstra has raised the monthly landline bill and reduced the price of a new mobile phone (so long as customers buy the high monthly fee plan) prompting more and more Telstra users to ditch fixed lines in favour of mobile phones. Those people staying with landlines are mainly using it for broadband Internet access with the ability to combine voice calls over the internet (or VoIP).
As of 1 June 2004, prices for monthly line rental will go up by as much as A$29.95.
Could this be the way Telstra reduces the high costs of maintenance and repair for traditional copper wire telephone lines while getting people to spend high monthly charges for mobile use and at the same time free up the landline for broadband services?
If this is true, it shows how a large telecommunications company can maximise profit and influence the marketplace in extraordinary ways.
Telstra reduces cost for broadband access
Broadband competition is becoming intense now that statistics are out suggesting 20 per cent of customers with 56k modems are contemplating the move to broadband in the next 12 months.
In response to the extra competition, Telstra has dropped broadband prices for the high end users. Since ADSL users were more likely to be attracted by the competitive offers from other broadband service providers, Telstra has given the biggest cuts to these customers.
Expect ADSL users with the 5GB and 10GB plans to have their prices reduced by A$45 and A$100 respectively.
However, a broadband community site known as Whirlpool was quick to highlight that Telstra's new prices is still no where near being the cheapest in the marketplace. According to its front page blurb:
"For example, Telstra charges $329.95 for 10GB, whereas iiNet charges $79.95 for 6GB peak / 6GB off peak [a total of 12GB]."
Telstra has reduced the monthly costs for retail broadband access to under A$60.00 (not including line rental etc). Unfortunately Telstra is exercising its monopoly in broadband services by not immediately reducing wholesale broadband Internet prices for other service providers. As a result, many smaller ISPs are having a hard time competing with Telstra in supplying broadband Internet services to the Australian community.
The consumer competition watchdog Australian Consumer and Competition Commission (ACCC) is close to taking action against Telstra for anti-competitive behaviour. When ACCC intervened on behalf of smaller ISPs for the way Telstra was pricing them out of the market, Telstra suddenly reduced the wholesale prices. But not enough to keep the ISPs happy. Now the ACCC has handed a consultation notice to Telstra saying the company was close to getting a competition notice which would see the company fined A$10 million. Telstra is being given the opportunity to respond to the allegations by Tuesday 9 March 2004. Telstra is trying to hit back by saying it is being targeted because of its shear size and dominance in the marketplace. In the meantime, while there is no mention by ACCC of a breach to any legislative act, Telstra is standing firm in its position.
The number of Information Service Providers (ISPs) is going down
With the big Internet players like Telstra flexing their muscle and displaying their market power, grabbing as many customers into their service contract plans, and controlling the network, there has been a reduction in the total number of ISPs at least within Australia.
Despite increases in Australia in the number of Internet subscribers by 92,000 (2.2 per cent) to 4.3 million at the end of September 2001 according to the Australian Bureau of Statistics (ABS), the number of ISPs operating in Australia dropped from 718 in September 2000 to 603 in September 2001. (8)
Although these ABS findings, when it was released in January 2002, do not enlighten us with a reason for the decline in ISP numbers, it is likely that strong anti-competitive behaviours and a feeling among customers of greater stability and reliability among the bigger Internet companies like Telstra is making it harder for smaller ISPs to continue operating in this market.
Unless small ISPs can remarket themselves and show an image of greater reliability, low-cost and stability in the marketplace, it is unlikely the trend in the number of ISPs will be reversed in the foreseeable future.
The latest ABS figures for March 2003 suggests the number of Australian ISPs continue to spiral down. From the 603 in September 2001, there are now 571 ISPs operating in Australia. (9)
And it isn't entirely due to customers deciding to join the top three ISPs Telstra, Optus and iPrimus which is putting out-of-business a number of smaller ISPs. Apparently consolidations are becoming the flavour of the month with businesses like iPrimus snapping up the smaller ISPs such as UseOz, Standard.net and Blue Mountains Internet.
The US is experiencing a boom in broadband Internet access compared to the 56K/28K narrowband users. A recent report from Nielsen/NetRatings claims there were 39 million users, or 13 per cent of the US population, connecting to the broadband network in the US in May 2003. This looks to be increasing at a rate of 49 per cent annually. Narrowband users, on the other hand, look like they are becoming a dying breed with numbers declining 12 per cent during the month. Should monthly prices for broadband drop even further (A$49 in mid-2003 and $40 in mid-2004 in Australia), a greater number of users will almost certainly move to the faster network.
Australians appear to be following the US trend in the take up of broadband networks. Telstra claims to have passed the 300,000 mark for subscriptions across both its wholesale and retail BigPond broadband services with the highest number placing their orders for broadband services in May 2003 of around 23,000. All other broadband providers have reported similar growths of between 25 per cent for the smaller companies to approximately 67 - 85 per cent for the bigger players such as Optus and Primus Australia.
And with higher network speeds come a greater amount of time and data downloaded by the users on the Internet according to statistics released by Internet audience analyst Nielsen/NetRatings Australia. Approximately 6,000 active Internet connections within homes and businesses across Australia participated in the survey and usage patterns for each computer user were recorded using special software provided by the marketing company. As the statistics suggest, broadband users would connect to the Internet about 41 times between April and May 2003 compared to 15 sessions for the narrowband (under 56K) users.
Time spent online for each session also increased for the broadband user to an average of around 24 hours (in fact, some would leave the Internet connection on more or less permanently if they can). Narrowband users, on the other hand, seem to get fed up of the slow connection after spending around 8.5 hours on the Internet.
Finally the number of pages viewed increased from 519 to 2040 pages on average when moving to the broadband network.
NOTE: This would explain why commercial broadband providers want to charge by the megabyte since people can easily and quickly download a larger amount of data than usual on broadband networks compared to the narrowband networks. In the past, narrowband users were often charged by a fixed block of time (e.g. 10 or 20 hours per month) or have it totally unlimited instead of by the 1, 2, 4, 6, 10, 100 or 1000 megabyte lots per month on broadband.
An inquiry into the state of competition in broadband has been given the green light by the Australian Senate after much lobbying by the smaller telcos such as Primus Telecom, Hutchison Telecoms, Macquarie Corporate and PowerTel forming the Competitive Carriers Coalition (CCC). The decision has effectively stopped the Australian Federal (Howard) Government from blocking the inquiry.
As one CCC representative said:
"This new inquiry offers an important opportunity to examine fundamental flaws in telecommunications competition in Australia including the anti-competitive structure of Telstra. The Senate will now be able to progress the work of the House of Representatives Inquiry into Telstra that was prematurely shut down by the Government earlier this year. It will also have the scope to recommend reforms to bring Australia's competition policy in line with that of major overseas markets." (10)
28 August 2003
The shear monopoly of Telstra in Australian broadband services has seen the company not only able to charge almost any price from customers wanting to use the services, but also Telstra is admitting that 17 per cent of its broadband profits from customers are made from additional and hidden charges.
How? Well, the thing that is getting new customers (about 10 per cent of all Telstra broadband users) caught out a lot is in the area of the cost per MB over the maximum allowable limit per month.
You see, new Telstra broadband customers with little or no computer and Internet experience are not being given the sufficient duty of care by Telstra to tell them exactly how they may be charged more for certain common situations beyond the standard monthly charge.
Generally, most broadband customers paying the standard monthly broadband rate are normally provided with perhaps a maximum of 2GB of digital data for downloading and uploading (other ISPs may not charge for uploading) over the Internet. But because it is broadband, it is very easy for customers to exceed the maximum allowable rate. Also, some file sharing programs which turn the customer's computer into a server for sharing files with other people can upload files quietly in the background without the customer knowing about it or how much has been uploaded.
So what's the solution?
Apparently some people outside of Telstra (probably including those working in the music industry) are suggesting customers should completely ditch all file sharing software because of this hidden or additional cost the software can bring to paying broadband users.
However, what Telstra has to remember is that all customers who are presented with a contract must fully understand every aspect of the contract in plain and simple language before signing including how they can be charged extra for common situations such as file sharing over the Internet. Otherwise it may be legally possible to argue the contract is unenforceable.
This lack of explaining all the details and giving the full price in favour of concentrating more on signing up as many people as possible could be a failure of some Telstra salespeople. However, the contract itself does strongly suggests it is in need of a major revision.
21 November 2003
The Australian Telecommunications Ombudsman has now got into the act by forcing Telstra to prove whether it has made an effort to contact customers of their unusually high monthly broadband bills approaching several thousands of dollars.
For example, one gentleman named Mr Steve Jacobs managed to rack up a whopping A$8,000 in one monthly bill for his ADSL service without his awareness because Jacob suspects another ADSL customer stole his username and password. The problem for Mr Jocob was, of course, how to prove the person using his ADSL service wasn't him or someone else.
As Jacobs said:
"How was I to prove it wasn't me? The usage was astronomical. There's no way I could pay a bill like that." (Warne, Dan. ISPs Slammed Over Billing: Australian Personal Computer. November 2003, p.15.)
Another interesting thing is how Jacobs failed to observe any instructions from Telstra in his ADSL-installation kit explaining how to set up a firewall and it certainly didn't include a password and username to help him have exclusive access and thus prevent unauthorised use of his ADSL service by other users.
Now the Ombudsman has acted on the complaints and this time he is requesting Telstra to prove it has done everything reasonable to notify the customer of unusually high monthly bills instead of keeping quiet and later hoping the customer will just simply pay up.
If Telstra cannot prove it has contacted the customers, Telstra will be required to waiver the bill or reduce it to a normal level.
Some competitive ISPs outside of Telstra have decided to provide a fixed monthly access fee for unlimited download broadband plans. The only catch this time is that ISPs will reduce the speed to 64kbps after around 300MB of downloads. For other ISPs, the uploading of information is not charged, only the download is charged. This hopefully will avoid unexpected bills at the end of the month and at the same time grab a few more unhappy ex-Telstra customers into their monthly Internet plans.
When looking for a good broadband access plan, make sure there is one fixed monthly fee, you have the maximum download and upload bandwidth possible at maximum speed of the broadband network (i.e. unlimited), and the plan should spell out the full upfront costs such as installation, and the cost for the entire period of the contract if you are required to sign for a certain period of time (e.g. 24 months).
Optus, a major competitor of Telstra, is now offering broadband access to the Internet for a tad under A$40.00 per month. Or more likely closer to $68.45 when we include the line rental and the cost of local calls. And add an extra A$179 for installation if you are not setup for broadband access to your home. For a minimum total cost for the 12 months of A$628.40, you will get up a basic 300MB download bandwidth capacity per month at maximum broadband speed of 512Kbps going down to between 20Kbps and 28Kbps after exceeding the data download limit. There is no time-limit for how long you can get on the Internet.
Telstra has upped the ante once again with an entry-level ADSL plan of A$29.95. Never mind the meagre 200MB monthly download/upload limit, the slow 256Kbps speed (well at least it is better than any 56Kbps narrowband plan) compared to standard broadband speeds of 512Kbps plus, and the hefty penalty fee of A$0.15 per megabyte in excess of the standard limit. So low was the price for brandband that it has seen many (mostly new) Internet users sign up. But it had also brought a wave of complaints from Telstra's competitors that they could not match the prices because the wholesale ADSL price (since it is owned by Telstra) was not reduced to below A$29.95. Only when the ACCC intervened by issuing a Competition Notice alleging anticompetitive behaviour did Telstra do the right thing.
Putting aside all the competitors' corporate noises against Telstra, it is strongly recommended customers do not sign up for these cheap deals. Why? Because of the restrictions which may cost the customer more money in the long term. You are better off paying for a mid-range broadband price plan of just under A$50 per month. These plans usually offer significantly better monthly upload/download limits (there are ISPs offering true unlimited plans) and no penalty fees (the limited plans may cut you off when you reach your limit or reduce your Internet speed).
Examples of broadband providers delivering true unlimited budget deals at around the A$50 mark as of June 2004 include the following:
- Dodo 256/64Kbps Unlimited Downloads for A$49.90
- TPG Home Unlimited 256 for A$49.95
For heavy users, the only true unlimited deal is the Dodo 512/128Kbps Unlimited Downloads for A$74.90. In the limited deal range, most people tend to be happy with the following plans:
- iiNet Bliink 512+ (someone needs a spelling check at this company) for A$69.95. You'll get 16Gb download limit with an additional 16Gb during off-peak. After that, shaping occurs beyond limit meaning the speed will be reduced.
- Internode PADSL-512-Unlimited-Red for A$59.95. You'll get a flat 12Gb download limit with shaping beyond limit.
Remember, the biggest catch to look out for in the broadband market are the monthly data limits and penalties for exceeding the limits. They are there because some ISPs have either signed up too many customers and need to restrict access to the network, or want to make an additional profit from (mostly inexperienced) customers who aren't organised well enough to keep a tab on how much they are downloading or uploading.
Your aim is to find the best deal with absolutely no restrictions or penalties of any kind.
Grapevine, the ISP formed by Actew and TransACT is offering a competitive broadband service of A$15 per month (after paying for a set-up fee) for a reasonable 500MB of data transfer and $0.08 per additional megabyte transferred. You do get a 10MB web hosting space, 10 mail boxes with unlimited aliases, and 5 email forwarders and 5 responders.
So how low can standard broadband get nowadays now that the new ADSL2 and ADSL2+ services are available?
Australia's cheapest broadband deal has to be Dodo's A$9.90 per month deal. You get a meagre 70MB per month but you are not restricted to downloading more data. It will cost you A$0.18 per MB extra over the limit (which you can easily do with broadband).
More about broadband
As of August 2005, broadband access is available as cable, ADSL and wireless.
For the fastest speed possible from your download and upload experience, we recommend cable as the way to go. Downloads are particularly fast for such things as hiring and watching digital movies online in an immediate and real-time sense just as the information is being transferred to your computer or television. The speed is roughly 24,000kbps. Uploads are a little slower to allow for the higher download speeds (which is what most people tend to use cable for). Upload speeds on cable tend to be the pultry 128kbps.
Telstra and Optus are still rolling out the cable technology so don't expect it to be available in your local area any time soon. Check their websites to determine the status of the technology in your area.
Your best alternatives to cable are ADSL and wireless. Wireless is a new system available only in the major cities but is slower than ADSL or cable. It is quickly becoming popular with most city people who want to be mobile and have constant access to the latest online information. Most, however, will stick with ADSL. ADSL is considered best for people who have access to a reliable telephone connection (i.e. cities and major towns) and there are enough low-cost ADSL modems to make the jump to broadband a feasible option.
The basic ADSL plan provides download/upload speeds of 256/64kbps. For serious users, the best performance you can find is around 1,500/256kbps.
A new ADSL2 version is being introduced by some providers (namely Internode and iiNET). This one provides a respectable download/upload speed of 12,000kbps/512kbps. But a better one is just being introduced known as ADSL2+ with speeds approaching those of cable. Expect the speed of this latter broadband system to approach 24,576/1,024kbps.
How fast can your telephone line handle ADSL? It depends on the distance from where you plug your ADSL modem and the telephone exchange. Generally the further away you are, the slower the ADSL speed. Although you can go quicker, the reliability of the broadband service will be hampered. Generally, if you are under 4 kilometres from a telephone exchange, you should be able to get very reliable broadband speeds of 256/64kbps. Of course, shorter distances will give you the opportunity to connect to much higher speeds.
For the maximum speed such as the ones we see in ADSL2 and ADSL2+, you should be within 1.5 kilometres from the telephone exchange.
If you are not sure whether ADSL will work through your telephone connection, contact your provider. A test can be carried out by the provider to see whether your line can give you ADSL access.
Providers will charge an installation (or activation) fee and a monthly access fee for broadband access. Activation usually means connecting you to the broadband network at the providers end. Installation usually means giving you the ADSL modem at a cost and connecting it to your computer. Other providers may use the terms interchangeably to mean both things.
Don't worry about all this. Competition is quite fierce, so don't be surprised if some providers waiver the installation and activation fee altogether. If you do get a free installation fee, look out for the free USB broadband modems. These are fine if you intend to connect just one computer to the broadband network. If you want to share the broadband connection with multiple computers, you have to get an ethernet broadband modem (more expensive).
Some providers are happy for you to keep your old broadband modem after the end of your contract and to use this modem with other providers. Or you can buy your own preferred modem. But always read the fine print and check with your provider for the latest policies.
Best Australian prices for standard 56K Internet access
As more and more inexperienced Internet users or those users with serious business use for the Internet believe broadband is the best way to go in 2003, the prices for standard 56K Internet access in Australia has suddenly dropped with further savings expected in the coming years.
As of September 2003, you can now get unlimited Internet access, 5 email accounts, 10MB web space to set up a personal web site, and an Australia-wide national untimed local call for A$19.95 (billed quarterly). It is slightly cheaper for 20 hours per month at A$15.95 with an additional A$1.65 per hour thereafter. Or for really efficient Internet users, you should be able to get 10 hours per month for A$8.95 plus A$1.65 for each hour over the limit.
You may find these sorts of prices at http://www.bigblue.net.au/.
As of March 2004, unlimited 56K Internet access is now A$9.90 per month. But do look around to make sure the price does not increase due to users exceeding the maximum allowable data download limits (should there be one for standard 56K Internet access?).
Best Australian prices for broadband Internet access
The best broadband deal in Australia is either Dodo's 256/64Kbps Unlimited Downloads for A$49.90, or TPG's Home Unlimited for A$49.95 per month. For standard 56K plans, the prices can be as low as $9.95 per month for unlimited Internet access. But do check for hidden charges if there are any.
Or try a truly unlimited 56K downloads and hours for A$16.99 per month at TPG.
The competition between these two Australian companies are hotting up as we speak so expect some more amazing deals over the next 12 months.
Kooee has gone on the bandwagon of unlimited deals with an interesting product. This company will not only give you unlimited 56k dial-up downloads, but you will also get unlimited free local calls with line rental included for $59 per month. (11)
Or for a real good limited broadband deal with a lower monthly charge, Exetel 256/A1 is available for A$25 per month with a 2GB download/upload limit. The nice thing about this offer is that even if you exceed the 2GB download/upload limit, you can continue to surf the Internet at A$3.50 per GB excess. If you plan your time just right, this can be avoided by doing your Internet work between 2.00am and 9.00am when the download and upload becomes totally unlimited and free. The plan includes 15 email addresses and 60MB of website space. Speed is roughly 256/64kbps. On the negative side, you must sign up for a six-month contract period.
Exetel also provides a 512/128kbps package for A$35 per month and A$3.00 per GB excess, maximum limit of 8GB per month during peak times. The same six-month contract applies. Could this be the best broadband deal in NSW?
And just to entice a few more Internet users to Exetel, there is also a heavy duty Internet package for A$80 per month. Again the same legendary A$3.00 per GB excess applies, but you do get a 12GB download/upload limit. The limit is removed during off-peak periods. So if you time yourself when to get online, you can have unlimited broadband use.
For really serious power users, you could spend up to A$139.95 for Internode Unlimited (SOHO-Extreme-FlatRate). Speeds approach those of ADSL2+ or 24,576/1,024kbps depending on how far away you are from the telephone exchange. There are no download limits even during peak times when a lot of internet users are competing for online information between the hours of 9.00am and 9.00pm. However, some users have experienced slightly slower download speeds during high traffic periods. Beyond that, you are not restricted to lower speeds at any time of the month because you have exceeded a download limit.
Cost to activate this plan from Internode is $348 which includes a 4-port Ethernet modem. You will also get a 50MB space for your web site, 5 email addresses and free spam filtering.
But if you don't want to spend this much, try Comcen Internet Unlimited (Totally Unlimited) plan. For A$49.95 you get a reasonable 256/64kbps with an "all you can eat" service at any time of the day or night. So you will never be throttled back in download or upload speed because of a download limit. You get 5 email addresses and free spam filtering. The only thing setting this plan back is the web site space. You'll get no more than 20MB. Free installation including a USB modem completes what is probably the best deal in Australia for broadband access. Spend an extra $49 and you'll get an Ethernet modem thrown in. And if you are prepared to spend $79.99 per month, speed increases to 512/128kbps.
Remember, the ultimate aim in finding the right provider is someone who can provide you with the best and most reliable ADSL download and upload speed for your telephone line, no installation fee, the lowest monthly access fee, and no restrictions of any kind (especially the download limit and, where possible, web site space, number of email addresses etc).
Check your account details regularly
As of October 2003, Australian Telecommunications Industry Ombudsman Mr John Pinnock has noticed a more than doubling of complaints about the debt recovery practices by telecommunication companies and Internet Service Providers since March 2002.
Among the techniques being used to recover debt include the selling of telephone and Internet bills of certain customers to debt recovery companies who will in turn default-list the customers to prevent them from applying for loans. This would be followed by selling off assets of the default-listed customers without notifying them of the reason why and often without checking the names and addresses to ensure the right customers are targeted or failing to show an original itemised account to prove the alleged debt acquired.
But what about for those who don't have a debt but the ISP just wants to encourage customers to pay by a certain preferred method so as to minimise the potential risk of not getting paid by the customers at the right times?
This is why some ISPs nowadays may choose to send out a tax invoice/statement to certain Internet users showing a higher than expected amount to be paid (usually coming after a recent change has occurred for the ISP such as a change in EFT details or business address for receiving cheques). The user may continue to pay the expected monthly amount until one day the ISP starts to mention in the latest statement of a "please pay within 7 days" and a yellow texter may be seen to highlight the amount to be paid. Often this will be accompanied by a form for the user to fill in giving authorisation for the ISP to automatically deduct payments from the user's credit card. That's how some ISPs like to encourage Internet users to provide their credit card details to them and so ensure the ISP of regular and timely payments irrespective of whether the user is up-to-date in his/her payments.
The problem seems to be with non-credit card Internet users paying by money order, cheque, EFT or some other means although it is still possible for credit card users to default on their payments as well.
If you are pursued by ISPs or telecommunication companies for any alleged debt amount, make sure you ask to see the original itemised account, and verify the name, address and telephone number on the account are valid. Also remember there is likely to be legislation to ensure the recovery of most debts do not continue outside the statute of limitations.
The Australian Bureau of Statistics (ABS) claims that 75 per cent of non-dial-up (assumed to be broadband) connections were from households, and there was a 51 per cent increase in the number of subscribers to the broadband network to 1.3 million for the 12 months to September 2004.
18 February 2006
Telstra Australia is discovering the limits of broadband on existing copper wire telephone lines. So the next stage will be to use fibre optic lines to raise the minimum speed of broadband to 12Mbps (in megabytes per second). The actual maximum speeds possible on fibre optic cables remains a company secret.
23 June 2007
In an election year we find the Australian Federal (Howard) Government announcing its own broadband upgrade for the nation to compete with Opposition leader Kevin Rudd's broadband upgrade policy in the hope of winning a few more votes. In an interesting move suggesting Telstra might be too slow and expensive to implement the new broadband network for both bush and city users, John Howard and his Communications Minister, Helen Coonan, have given A$1 billion to an independent consortium of Optus and Elders to establish a high-speed broadband and associated phone services in rural communities within 2 years known as Opel.
The Government effectively ignored Telstra's bid and did not ask Telstra for further information.
Part of the reason for the decision is that Telstra was focussing too much on the installation of fibre-optic cables to key nodes to help connect more homes. Why? So Telstra could continue to own the wires for its own exclusive use. But this is far too slow and expensive. The consortium, however, have given a much faster deadline and will use wireless technologies to allow more homes including those in the bush to access high-speed broadband at a lower cost than the one proposed by Telstra.
NOTE: The wireless broadband system is likely to be in the public frequency band of 5.8GHz.