Broadband or Bust

Cost

Any discussion about the cost of fast home Internet access must start with a look at your current phone bill. Most folks with a family or a home business figured out long ago that tying up the phone line with an AOL connection makes it hard to call out for pizza.

As a result, many people who wanted to be connected shelled out between $15 and $30 per month for a second phone line. Add that to the monthly cost of an ISP (typically about $20 per month for unlimited access but potentially higher), and millions of Americans could be paying $50 or more each month for poky 56-kbps dial-up Internet access.

Cable modem and DSL services were pricey a few years ago when they were introduced, but competition between the two technologies has driven the cost down to levels approaching that of a second analog phone line. Bruce Steidel, director of a major paper manufacturer in Princeton Junction, New Jersey, buys cable service from Comcast and uses AT&T@Home as his ISP; for the combined service, he pays $40 to $45 a month.

Closer to home--my home, that is--I buy 284-kbps DSL service from my local telephone company, US West. My connection costs $30 a month, and US West offered to sell me ISP services for an additional $13. But I figure that the phone company already gets enough of my money, so I pay $20 monthly for ISP service from Micron.net, bringing my total monthly high-speed bill to $50. And because voice traffic and high-speed data can share the same wire (the phone line uses a much lower frequency) my local phone line is included in the price I pay for DSL. Cable companies can offer customers discounts on cable service as an incentive to sign up, but so far they can't give you a dial tone.

The price you pay depends on such factors as the speed of the package you buy. Most companies have set-price deals that allow you to receive data at one transfer rate and to send data to the Net at a lower rate. (When this asymmetric arrangement is applied to DSL, it's called ADSL. When you get symmetric speeds downstream and upstream, it's called SDSL.) John Williams buys SDSL service rated at a snappy 768 kbps from Covad in Maryland, but due to lack of competition he has to pay a premium. "I don't like the price," he says. "It's about $99 a month, and it should be half of that. I have friends with cable modems in Florida paying less, but this is the price you pay when you deal with the local phone company." Lower-transfer-rate packages and ADSL service deals often cost much less. Covad, for example, charges $59 per month for its basic home ADSL package but up to $349 for its high-end, business-focused SDSL.

Besides paying for the service, you'll need to buy or rent additional hardware, since neither DSL nor cable modems come standard on most new PCs. Usually, the company that sells the service also supplies the modem. But because a modem that works in one area with one provider may not work elsewhere with another, you'll have to swallow the cost of the hardware your service supplies.

DSL providers will probably sell you the modem because they're not eager to manage equipment leases. Cable companies, on the other hand, are accustomed to leasing equipment and may add the modem's lease rate to your monthly bill. Leasing a modem typically involves a lower up-front expense, but it can cost more in the long run. Martin Trisdorfer of Fairfax, Virginia, pays $45 a month for cable modem access from Cox Communications--$15 of it for the modem. In two years, he'll have spent hundreds of dollars on rental hardware.

Sticker shock hits home with the price of installation: Expect to pay $75 to $150--and potentially much more--to cover a technician's house call, the cost of cables, processing fees, and a litany of teeny expenses that providers lump together under the vague heading of "installation." I got off cheap: US West provided me with a DSL router and installation for just under $80, but I did the actual installing myself. (To minimize the price you pay, watch for promotional offers.)

Several companies now offer free DSL, but you have to put up with immobile, unshrinkable (and annoying) ads on your screen whenever you surf. For the dirt on free DSL, see our April report, "Beware of New No-Cost Broadband Options."