How Does Prepaid Broadband Work?

prepaid broadbandIf you have seen the many advertisements for prepaid broadband, you may be wondering just what prepaid broadband is and how it works.  Sure the idea is simple: it is broadband and prepaid, but what is the catch?  After all, there is always a catch, right?  Well, prepaid services do not come with as many catches or gotchyas as you might think, and here is a general rundown of how they work as well as a basic overview of some of the considerations you need to be aware of.

Prepaid Broadband Hardware Isn’t Free

The first thing that catches people’s attention when it comes to prepaid broadband is the fact that they are very unlikely to receive a free piece of hardware such as a modem.  This is because there is really no advantage to a carrier to give out equipment at a loss.  Some carriers may give out discounted equipment if they have locked it to their own network, meaning that even if the person buying it only pays for a month or two that the next person to use that device will be forced to do so on that carrier’s network, but this is the exception and not the rule.

To understand why this is, you need to take a look at the contract-based side of the high speed Internet access fence.  Contract based plans protect the interest of carriers by enabling them to charge higher monthly premiums to disguise the fact that they are giving away a piece of equipment that cost them money, even if it was only a few bucks.  The downside that they do not discuss us that people on a contract keep paying this fee until they quit even though the cost of the hardware was already recovered!  This is a certain advantage for prepaid broadband as carriers do not need to seek to recover the cost of a modem or modem/router combo because they are not giving it away.

The only downside to this is that a lot of people opt to go for their own hardware without understanding the standards needed or the support rules. Carriers are most often all too happy to offer free unlimited technical support for hardware that they sell or subsidize to any degree, but generally charge for or flat out refuse to troubleshoot or even offer setup help for third-party hardware.

Prepaid Broadband Setup Fees May Apply

Just as carriers can subsidize hardware purchases by inflating premiums for their contract-based accounts, they often disguise the fees associated with sending a technician out to flip a switch or cross some wires.  Do not expect such fees to be waived for you if you opt for a prepaid plan.  Expect to pay these fees up front before a connection is made, but at least do so with the knowledge as to why this is the case.

Reactivation May Incur Similar Fees

Depending on the type of hardware and network being used, you may need to pay a similar fee to restart your service if it requires a technician to go to your home or place of business to adjust anything.  Of course, this is not always the case and some technologies are essentially immune to this as they are not based on a location at all, especially the entire family of wireless broadband which includes 3G, 4G, WiMax, directed radio signals, and satellite-based broadband.  That does not mean that the carrier may not elect to charge a startup fee, and there may be legitimate business reasons for doing so.  Either way, you want to be sure that you understand the reactivation fees as well before buying any type of prepaid broadband service.

You Can Go Up, Down, or Even Stop When YOU Want…Kinda

Because there are no contracts to worry about, you are generally free to opt for a faster plan, a slower plan, or even start and stop when you want.  There may be some exceptions to this, such as providers not offering to return the unused balance of a prepaid period, but these are just part of the process.  Knowing that these issues exist may stop you from spending a month’s worth of broadband fees when you are going to be gone for half of that period.