Hi, I'm looking to set up broadband internet at home.

Hi Ed,

Great questions! Let's break them down one at a time.

1. ADSL 

Asymetric Digital Subscriber Lines (ADSL) is a technology that uses standard Public Switch Telephone Networks (PSTN) to deliver high speed internet connections on twisted pair copper cables. Sounds easy, right?

In a nutshell, ADSL is the name of the technology. ADSL2+ is the most recent and most advanced standard available. ADSL is capable of up to 8Mbps speeds from the exchange. ADSL2+ is capable of 24Mbps from the exchange.

Naked DSL is the same underlying technology. To understand the difference, you have to consider that your telephone line is made up of two copper wires, twisted around each other (twisted pair cable). This was installed before ADSL as standard practice around the world, to provide an extra, redundant line in case the main line failed, or more services were needed.

In a bundled configuration, one line is activated at a low frequency to carry a phone voice service, while the redundant line is re-purposed for higher frequency data services.

In a 'Naked' coniguration, both lines are dedicated to the data connection, so the speed is increased. But not by much, and not in all cases.

Economically, there is no advantage to Naked DSL. The first part of your connection, between your home and the telephone exchange, is provided by Telstra regardless of who you're paying for the service. This is why bundles have to be advertised with a separation between the charges - ie. $30 for internet, and $30 for line rental.

In some areas, service providers have access to the phone lines under a different wholesale regime, which allows for 'Naked' services. But Telstra still gets a line rental fee - it just doesn't have to be advertised separately. So the price can be sold as a single unit. Instead of $30 + $30, it can be sold as $70, for just the internet (yes, Naked is actually more expensive).

Of course, Naked DSL service providers can take advantage of people's misunderstanding of the economics, and can advertise "Don't pay line rental!". This is true in the strictest legal sense - you're not paying for an item called 'Line rental', but you're paying the same amount anyway.

Naked DSL is best suited for businesses, customers who are from the exchange (and need any speed boost they can get_ and customers in share accomodation who don't want to risk 'bill shock'by providing a costly landline service to untrusted housemates. Otherwise, it doesn't offer many benefits over a bundled service, where the customer chooses not to use the voice service.

As for ADSL- most exchanges have been upgraded to ADSL2+, so ADSL is offered as a fallback position, rather than as an alternative.

2. Modems

A MOdulator/DEModulator (Modem) is the device that connects to the internet feed, and translates the electrical signal into data that your computer can use. In Mobile Broadband, the internet feed is provided via a radio signal from a mobile tower. In Cable, the feed comes from a cable/Pay TV point in the wall. In ADSL, the feed is from a telephone connection point.

A basic modem does this, and then provides a single output to connect 1 PC to the modem. A modem with a Wi-Fi router built in will allow 4 wired ports from the modem, and the option to connect up your computers (and iPads, iPhones, wireless printers, etc) to the device, simultaneously and wirelessly.

There have been several standards of Wi-Fi over the years. Most modem/routers are capable of the latest 802.11n standard, allowing speeds of 300Mbps up to 100 metres. Of course, most people get speeds of 5 - 15 Mbps from their provider, so there's no risk of Wi-Fi being slower than a direct connection.

Most modems that come free, or sold separately by your service provider, will be Wi-Fi modem/routers built by Netcomm or Netgear. They're ok. They do the job most people need them to do.

More advanced modem/routers will come with USB inputs, so you can plug in a hard drive and share content to every computer in the house. Or they'll come with inputs for DECT handsets that make VoIP calling easier. Or they act as internet TV set top units. There's plenty of things manufacturers can convince you to spend money on.

But a modem/router is a bit like a toaster. It's a very functional, boring item once you get it going. Droputs mostly occur from line faults (though some modems are better at reconnecting). top-of-the-line brands include Belkin and Billion.

3. Bundling discounts

You've asked whether going with your phone provider for a broadband connection as well, gets you a discount. Usually, yes.

Apart from Telstra's connection between your home and the exchange (which your phone provider is leasing), they also have Australia's largest wholesale network for the connection from the exchange to the rest of the internet.

But in about 400 metro and growing regional spots, there are competitors for that second layer of your connection. These are Optus, TPG and iiNet (including Internode, Westnet, Netspace and a few others in the iiNet group). Primus serves about 200 exchanges. Eftel and Spin have even less than that.

For any of these providers, you can obtain significant bundling discounts if you pay for your line rental through them. For instance - TPG charges you $60 for Unlimited Broadband if you're otherwise paying for your Telstra line rental directly to Telstra, or to another reseller.

But if you pay your $30 line rental to TPG, they will reduce the cost of broadband to $30 as well - making the whole bundle $60.

BUT...if you're in an area where Telstra provides the connection to the exchange, AND the connection to the internet, then these providers can only offer you plans based on Telstra's wholesale pricing. And this is expensive. Optus is the only big telco that won't wholesale Telstra's 2nd layer network - if you're not inside Optus' network 'footprint', you get nothing from Optus.

Technically, BigPond (Telstra's retail internet arm) offers bundling discounts, but these still make their prices slightly more than their wholesale price - Telstra'can't sell retail services cheaper than what they sell to their wholesale customers.

Confusing? I know. If you need more straightforward direction in finding the best modem, plan and provider for you, give us a call.

Thanks,

Adam at CompareBroadband

1300 106 571