Broadband basics guide

Make sense of the bits and bytes.
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01 .Introduction


Broadband is a high speed connection to the internet. It’s called 'broad' because it allows a large amount of data to flow between your computer and the outside world, which makes it possible to use your internet connection for data-intensive things such as watching video. It also reduces the delay in loading pages.

In this report we tell you what you need to know in order to choose a broadband plan. This includes the types of packages (ADSL, cable, satellite, etc), the providers, speed options, data caps, installation, contracts, customer service, and more. See also our 2009 ISP satisfaction survey.

Please note: this information was current as of April 2008 but is still a useful guide to today's market.

In brief

  • It’s important to estimate your potential data usage before you commit to a plan — see Choosing a plan.
  • Contracts can be complicated. It’s worth reading the fine print to make sure you don’t get locked into an outdated service — see Contracts.
  • Broadband prices are usually calculated on data use, rather than time online — see Doing the numbers.
  • Customer service is an important factor and the big players don’t always get it right — see ISP satisfaction survey.


The more information you have the better informed you are, especially when it comes to broadband.

  • ISPs often provide an online tool that allows you to keep track of how many megabytes you have left.
  • Some plans are called unlimited, but really mean you can have a large amount of data (usually more than 10GB) before you’re shaped.
  • Plans change often, so keep a close eye on what ISPs are offering. If a plan changes just after you’ve purchased it, you may be able to move to the new plan if it’s to your advantage.
  • VOIP is potentially cheaper than a fixed line telephone, but may have lower sound quality or a delay. Also, if there’s a power blackout you can’t make 000 calls and will lose your phone connection.
  • If you’re having trouble with an ISP the Australian Communications and Media Authority (ACMA) offers some helpful information, or contact the Telecommunications Industry Ombudsman (TIO) if you want to make a complaint.

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There are several different types of broadband connection:

ADSL Asymmetric Digital Subscriber Line

An ADSL connection uses your phone line but can manage much higher speeds than a normal dial-up connection. It’s 'always on', which means the modem remains connected even when your computer is turned off.

You can still make telephone calls while the modem is connected because the frequency the modem uses to transmit data is well above anything you can hear. However, you’ll need filters on each phone to make sure there’s no interruption to the data flow and you don’t get audible interference. The modem and filters are usually supplied by the internet service provider (ISP) when you sign up.

Connection speeds vary depending on your plan and also the vagaries of the internet, but sending data is always much slower than receiving it, which is why it’s called asymmetric.

You have to be within a certain distance of your telephone exchange for ADSL to work. It’s best to check with an ADSL provider to see if it’s available in your street.

ADSL2 and 2+

These are faster versions of ADSL that may work at greater distances from the telephone exchange. At the moment 2+ is the fastest of this form of broadband connection, but as the speed increases the price often follows.

Naked DSL

This gives you ADSL without having to pay the line rental for your fixed phone line. It might save you money, but you won’t have a fixed line for making phone calls. You have to rely on your mobile phone or use a VOIP service (see Glossary for an explanation of VOIP).


Optus or Telstra are the main suppliers of cable, which requires the same connection as that used for pay TV, consequently it’s only available in specific areas. It’s as fast or faster than ADSL 2+ and, like ADSL, is usually much faster to download than upload. Speeds vary depending on how many people are using the system in your area.

The cable connection is via a modem but is separate from your telephone, so there’s no interference and it’s always on.


As the name suggests, there’s no connection to a cable or phone line. The modem connects to a wireless network in the area via an in-built antenna. This means you can place your computer and modem anywhere within the network coverage, which dramatically increases your mobility if you have a laptop computer.

Claimed maximum speeds vary from roughly comparable with ADSL to well below, but wireless is susceptible to interference from all sorts of devices, from power lines and sub-stations to microwaves and some cordless phones. Any of these may reduce the speed of your connection, or cause it to drop out altogether depending on prevailing conditions.

Claims of mobility may be overstated. Taking the laptop out into the garden may be OK, but it’s a lot less likely that you’ll maintain a connection to the net while travelling from home to work. Most wireless networks have blind spots and, as mentioned above interference is a problem.


This option is expensive and relatively slow, but has the advantage of reaching remote areas where there is no other option. It requires a satellite dish, which needs to be installed professionally on the roof.

Broadband providers

There are currently more than 800 ISPs in Australia and most offer some form of broadband plan. This makes choosing one a daunting exercise. Many serve a limited area, which helps in the process of elimination, but sorting through those that service your area can still be time consuming.

Websites such as broadband choice or Phonechoice (no relation but they obviously liked our name) can help by providing a means of sorting plans based on your preferences. Talking with friends and neighbours can also be helpful, particularly if you’re in an area with limited options.

Many ISPs advertise in local papers, on radio and TV. A full list can be downloaded from the Telecommunications Industry Ombudsman's website.

Your location will influence the amount of choice you have when deciding which type of broadband connection you want. If you’re in a remote area, satellite may be your only option, but even in a major town you could be limited to the slower ADSL speeds if your local telephone exchange hasn’t been upgraded to handle ADSL 2 or 2+.

Broadband is sold in plans, which usually give you a certain capacity per month and lock you into a contract price and period. They are difficult to compare because they often include other things such as fixed line or mobile phone usage and pay TV. The following features relate to the broadband part only.


ISPs will use their theoretical maximum speeds as an advertising lure, but you should consider it in the context of how you normally use the internet at home.

If you’re mainly into email and occasional web browsing, a slower speed is probably fine. As you increase the frequency and size of the data you download the more convenient a faster speed becomes. Your experience of broadband at work may help if there is one.

Broadband speed is measured by the number of bits of data that flow up and down from your computer to the internet in a second. The number of bits can be very large, so it’s common to refer to them as kilobits or megabits per second (see Glossary for more detail).

Sending data (uploading) is often significantly slower than receiving (downloading). If you regularly send large files (image files, for instance) this may be an issue, but for many it’s a minor inconvenience.

Pre-paid usage

The plans not only limit the speed at which data comes and goes, but also how much data you’re allowed per month. These data limits are usually measured in megabytes or gigabytes (see Glossary for more on the difference between bits and bytes). You need to carefully consider these limits because some plans carry severe penalties for downloading more than your allocation.

These penalties are usually up to about 15c per megabyte. This may not look like much, but a five-minute movie trailer can be about 30 megabytes. Add a few program updates, maybe some music, and things can get quite expensive.

Many plans offer an alternative system called 'shaping'. With these plans, reaching your limit doesn’t incur a financial penalty. Instead, downloading and uploading speeds return to something similar to a dial-up connection. This is a much safer option if you’re unsure how many megabytes you’ll need.

Some ISPs count both sending and receiving when calculating usage. Most only measure downloads from the internet to your computer. Obviously, the latter is a better deal at equivalent overall cost and speed.

In some plans the size of emails is limited and they may only be stored for a set period. If you regularly send or receive big files (such as images) you should check these limits.

Setting up

Check that your computer and its operating system are up to the job. If you’re going to connect via cable, wireless or satellite, then a phone line isn’t necessary for your internet. It is for all versions of ADSL.

Typically, ISPs charge a one-off set-up fee that covers its costs in putting you on the system or transferring you from your existing ISP. A CD with automated set-up software is usually supplied, but you may need to modify some settings to suit your circumstances.

ADSL connections require a special modem and filters, which attach to existing telephone connections on the wall — most ISPs will have a list of preferred models. You can usually purchase these as part of the set-up fee, but look around because they may be cheaper in your local computer or electronics shop.

Installing both the modem and filters is just a matter of plugging them in the right way — your ISP should provide clear instructions on how to do this yourself.

If you’re connecting via wireless, you’ll need a special wireless modem which the ISP provides, at a cost. It’ll need power, but doesn’t require a connection to the phone line. An alternative is a modem card which plugs into your computer’s USB slot. This is useful for laptops and provides mobility, but reduces your computer’s battery life.

Cable and satellite installations require a qualified tradesman. The former uses the same cable as is used for Pay TV and the latter has a satellite dish that has to be pointed at the satellite. Installation may be arranged through your ISP and costs may vary depending on your location, as well as the length and nature of your plan.

Longer contracts should have a lower monthly charge, but make sure you check. The downside of a long contract is that you may miss out as technology improves.

Other things to consider when checking a contract:

  • Exit penalties These may apply if you change ISPs before the contract term is up.
  • Changing your plan If you decide to upgrade or downgrade your plan with the same ISP within the contract period you may be up for additional costs.
  • Usage Ask how your usage is measured.
  • Your obligations when using the system, these are usually included in the contract under 'Acceptable use policy'.
  • ISP’s obligations Check the ISP's responsibilities with regard to help lines and faulty equipment, especially if the ISP retains ownership of the modem or other hardware. Some ISPs won’t help if you’re using equipment they haven’t endorsed.
  • Bundling If your broadband is bundled with telephone or TV, check what happens to your broadband charges should you decide to vary the other parts of the plan.
  • Variations ISPs may retain the right to vary the plan during its course. If this happens you could be in a position to cancel the contract and avoid a high exit fee.
  • Cooling-off period Some contracts, usually from door-to-door sales, have cooling off periods which allow you to cancel without penalty.
  • Home networks These may not be supported under some contracts.
  • Home business Make sure the contract doesn’t exclude multiple users or other activities that apply to your normal business activities.
  • Privacy All ISPs should have a privacy policy which is worth looking over to ensure your information will be handled carefully.
  • Relocating Moving house can be complicated and some ISPs make it easier than others, you can get an idea of what’s involved from the contract.

Comparing broadband plans is complex, particularly if you’re considering bundling landline or mobile phone as well as pay TV.

The first thing to do is determine how much you’re already spending on these services. Try to do this over a similar timeframe to the period of the contract you’re considering. If you’re currently on a dial-up internet account, determine what your data usage is over a typical month.

If your ISP doesn’t provide this information, the table below is a rough guide.

Sending and receiving text email, small word processing documents or text-based web pages 0.02 to 0.05 MB each
Sending and receiving still images 0.05 to 0.25 MB each (high-resolution images can be much larger)
Downloading a music file (about a four-minute MP3) 4 MB
Downloading a five-minute music video or movie trailer 30 MB
Source: Australian Communications and Media Authority

Most people will use more data with a broadband connection than a dial-up connection because there’s less delay, so add about 50% to your calculation to compensate. Then choose a broadband plan that provides enough data for your needs and add as much above that as you can afford, just in case.

Bundled phone plans usually offer a discount on either the broadband or phone component. These bundles are usually found on the ISP’s website, but bundles that include pay TV are usually only offered when you begin the sign-up procedure or as part of a direct-marketing campaign. Take your time and check the real value of these bundles for your purposes. Compare the broadband component against your normal usage because they will most likely have a lengthy contract period.

The table below provides some low-cost broadband plans based on the following scenario:

  • Type The ADSL broadband component is separate from fixed-phone line, mobile phone and pay-TV costs.
  • Speed Download speed is at least 256 kbps.
  • Capacity A minimum of 1 GB of data is included.
  • Penalties Any excess data usage results in the speed being ‘shaped’, rather than incurring a penalty rate.
  • Availability All are available in a metropolitan area, across the country.
  • Contract period six to 12 months.
Provider Plan Availability Speed (Mbps, download / upload) Contract term (months) GB included in plan Minimum monthly charge ($) Setup cost ($) Cost for 12 months ($)
GOtalk ADSL1 Light ACT, NSW, Qld, SA, Vic, WA 512 / 125 12 9 29.95 0 359.4
Australia On Line 256k Fast 4GB ACT, NSW, NT, Qld, SA, Vic, WA 256 / 64 12 4 29.95 49 408.4
Chariot netconnect NEW ADSL Communicate ACT, NSW, NT, Qld, SA, Tas, Vic 256 / 64 6 1 29.95 59.95 419.35
TPG Internet Light 256/6GB ACT, NSW, NT, Qld, SA, Vic, WA 256 / 64 6 6 29.95 59.95 419.35

Here are some of the words often used to talk about internet issues:


A low-speed internet connection which requires you to make a phone call to your ISP whenever you wish to connect. This type of connection is often charged by time online rather than by the amount of data transferred. You can’t make phone calls while connected to the internet.


This is a measure of data. Each kilobit equals 1000 bits. One kilobit transferred in a second is written as 1 kbps.


One megabit of data equals 1,000,000 bits and when transferred in a second is written as 1 Mbit/s or Mbps.

Megabyte (MB)

This is another measure of data. A megabyte has 1,048,567 bytes and each byte is made up of eight bits of data.

Gigabyte (GB)

One GB of data equals 1,073,741,824 bytes.


A device that allows you to connect your computer to the internet. Different types of modem are needed for ADSL, cable or wireless connections.


This is a type of plan where data transfer rates are reduced (usually to around dial-up speed) if you use more than your allocation of data in a month. The alternative is a penalty rate per MB, which can be very expensive.

USB (universal serial bus)

This is a connection commonly found on computers.

VOIP (Voice Over Internet Protocol)

This allows you to make phone calls using the internet rather than traditional telephone technology. (See our report All about VOIP for more.)

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