Is your ISP Ripping you off ?


Are you absolutely sure that your Internet service provider is giving you the best deal your money can buy? If not, are you willing to make the switch?

To help you decide, we've provided a comparison chart on some of Australia's best ISPs and compiled some hot tips to consider before signing upChoosing an ISP is hard enough without the suspicions harboured by many in the Net community that their ISPs are seriously overcharging for the services they provide.

Their distrust is compounded by the abundance of ISPs in the market (estimates vary but 400 seems about right) all offering such diverse services and fee structures that meaningful comparisons are almost impossible. And prices do vary widely - research company www.consult says there can be as much as a sixfold difference between fees of the top 20 ISPs alone.

It all makes selecting the right ISP a daunting task. But before blaming the ISPs, consider the view of net experts who say the real offender, when it comes to pricing, is the raw cost of bandwidth.

Kim Davies, a content programmer/developer for WA's largest Internet company and editor of the Australian ISP List ( says suspicions of ISP rip-offs arise from a misunderstanding of what it costs to be an ISP.

"Basically all Internet providers run at little profit, with most money they make being injected into the company to help it grow. Most smaller providers are funded by other companies such as computer stores. This is particularly true in rural areas where it is difficult to actually make any sort of profit with the costs involved."

Davies says while increased competition has seen a minor decrease in wholesale cost, the cost of innovation is high.

"Certain sectors of the Net community seem to think all providers can offer Internet access at 19c/megabyte (the rate Telstra will charge the ISP), without considering the costs of capital, plus staffing technical divisions and help desks. Others seem to think the providers flogging "unlimited" accounts at $20/month can offer the same quality of service the bigger players can at a higher price," he said.

But the high costs of bandwidth and innovation don't mean there aren't real differences between ISPs that can save you money and win you a better level of service - as long as you know where to look.

Choosing an ISP is complex, and there are a number of factors to consider before signing up, including whether the ISP offers a local access number. Reliability, performance, stability, and support can also be as critical as cost in making a decision.


Internet pricing is a complex issue, making simple hourly rate comparisons all but impossible. Some ISPs seem incredibly cheap, others phenomenally dear, but beware those offering low flat monthly rates - such charges may not be economically sustainable and often such schemes limit each online session to one or two hours, after which you will be unceremoniously cut off.

Many ISPs charge a registration or joining fee at sign-up that includes a set number of "free" access hours. From then on you'll either be charged on a pay-by-the hour basis or a flat-rate monthly, quarterly or yearly fee with a set number of "free" hours bundled in. In other words charges can be divided into the following three areas:

A set per-hour rate (the average is around $5),sometimes cheaper during off-peak times.

A fixed rate-per-month plan giving you a certain number of access hours every month and with bulk buying factored in. (For instance 10 hours a month online might cost you $40, while 100 hours per month might cost just $1 per hour).

Flat "all you can surf" fee (usually with limits on the length of any one online session).

Hidden Extras

Signing up to a competitively priced ISP could still cost you a bundle unless you can dial into the ISP for the price of a local call. Incurring STD charges could add a small fortune to your next telephone bill.

Some ISPs have increased their points of presence (POPs) (regional dial-in points for local access) over recent times, an important consideration if you don't live in a capital city or if you travel around a lot.

Some ISPs offer access to regions just outside their own at "community call" rates. Find out whether you can take advantage of any savings plans that will keep line charges down - call Telstra (008 052 052) or Optus (1800 500 005) for more information.

Technical support standards

Can you get technical support for the price of a local phone call? Does the ISP provide its own connectivity software?

Ideally your ISP will offer support outside office hours, and will provide either a local support number or 1800 support line. Any ISP that limits support to 9am to 5pm Monday to Friday can't be serious about catering to the non-business user.

The best ISPs used to offer a comprehensive set of bundled software providing e-mail, Web browser, FTP client, news reader access, IRC, FTP, Telnet and so on. These days it's more likely to be either Netscape Navigator or Internet Explorer and getting the rest will be up to you. All software supplied should be pre-configured for dialling into and connecting with your chosen ISP or accompanied by a clearly written instruction booklet to achieve the same end.


Some connections can seem painfully slow. Look to upgrade your modem to a 56Kbps by all means - it will certainly help cut access times to some extent. But unless your ISP offers equivalent speed from its end, you're likely to be dissatisfied with your performance.

Some ISPs are yet to upgrade their modems to the new standard. Others have relatively poor modem-to-user ratios, meaning some callers get an irritating busy signal. Ideally the modem-to-user ratio should be at least one modem per every 10 users.

Again, many ISPs, including most small ones, connect to the Internet through the national and international backbone link maintained by Telstra.

Bigger service providers have their own private networks that are just about guaranteed to offer faster performance than the Telstra backbone. But if the ISP provides only a domestic backbone international access will still suffer. And some ISPs can dramatically speed downloads by using a proxy server to "cache" content of popular sites at their local server.

ISPs that support software compression on their dial up connections can also offer higher speeds than their competitors. For hints on how to speed your connection, see ISDN seems attractive, and you've got the money to spend, you might want to consider Telstra's OnRamp Integrated Services Digital Network (ISDN). You get two digital lines, digital phone calls and a permanent connection that is claimed to transmit data up to four times faster than analog modems.

Prices start with OnRamp 2, the basic flexible building block of the ISDN stable of products. This has a connection fee of $295 per month and monthly rental of $70 per month for the light call plan and $200 per month for the high call plan.

ISP Check List

How is the ISP connected to the Internet - does it use only the Australian public Internet backbone, or operate its own?

What Access Speeds are offered and what is the policy on upgrading Internet connection capacity as demand grows?

What access software does the ISP provide?

How do existing customers rate reliability? Do they suffer excessive busy signals? Is the system always slow? Have they lost E-mail?

How long has the ISP been operating? How many customers does it have?

What customer support does it offer? Is it free? When is it available to customers?

Is there a choice of pricing plans? Can you change if the one you're on doesn't suit?

How many points of presence does the ISP offer? Can you dial in for the price of a local call?

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about CNET NetworksNetSpeedOptusTelstra Corporation

Show Comments