When you sign up for cable Internet service, you need a modem. You’re often asked to choose between renting the modem from your Internet service provider for a monthly fee or buying it outright.
If you’re already signed up for cable Internet service, you may see a “modem rental” fee on your monthly bill. You can eliminate this fee by buying a modem outright.
Note: we originally wrote this article a while ago, but we’re updating and republishing it today after Comcast decided to increase their modem rental fee to $10 per month. Considering you can buy a Netgear cable modem for $99, you’ll start saving money in 10 months! After 2 years you’ll have saved $140.
The DOCSIS Standard
Cable Internet service providers don’t create their own proprietary standards to communicate over the cable line. Instead they use the DOCSIS (Data Over Cable Service Interface Specification) standard. Because DOCSIS is standardized, you’re not limited to the modem your ISP offers to you. You can buy and use any modem that supports the version of the DOCSIS standard your cable Internet provider offers.
You can generally find information about supported modems on your ISP’s website. For example, Comcast offers a DOCSIS Device Information Center that lists modems that will work on their network. You might have better luck just searching Amazon for “DOCSIS 3.0”, finding a model that you like, and then checking your ISP to make sure it’s compatible. Your ISP may have a web page that lists this information for you. If they don’t, call their phone lines and ask them for more information.
Editor’s Note: make sure that you pick a router with gigabit network ports on it, otherwise you’ll be limiting yourself should you decide to upgrade your internet connection in the future. For instance, this Netgear N600 cable modem works with Comcast, has gigabit ports, supports up to 340 Mbps and even includes Wi-Fi, but this $44 Motorola only supports 100Mb LAN connections and doesn’t have Wi-Fi.
The Break-Even Point
How much money you can save depends on how much your ISP charges you for modem rental versus how much you’d pay for the modem up-front. For example, you can get a modem that will work with Comcast for $100 on Amazon — we’ll use that number, although you may be able to get a modem for as low as $50 (although as we noted earlier, they will usually be limited to 100Mb maximum throughput) Many Comcast users have reported than Comcast is now charging them $10 a month per modem rental fee.
$100 divided by $10 per month equals 10 months, so the break-even point here is just under a year. If you buy your own cable modem instead of renting on Comcast, you’d start saving money after about a year. If you can get a $50 modem, you’d start saving money after just 5 months! Check your own ISP’s fees and the cost of buying a compatible modem so you can do your own math and find your own break-even point.
If you plan on sticking with your current Internet service provider for longer than the break-even time, it makes sense to buy your own cable modem up-front and save on your bill in the long-run. On the other hand, if you plan on moving or switching Internet service providers before the break-even point arrives, you can save money by renting the modem from your ISP and returning it to them when you’re done.
Other Considerations
Modems aren’t always transferable between ISPs. In fact, your best option in some areas may be ADSL, fiber optic, or satellite Internet services that don’t require the same type of modem. You shouldn’t buy a modem with the plan on taking it with you when you move — you may not be able to use it with your next Internet service provider.
You may also want to contact your Internet service provider and ask if they plan on upgrading their system any time soon. If you rent a modem, you’ll get a new one when they upgrade their systems. On the other hand, if you buy a modem and your ISP upgrades to a new standard that requires new hardware to make full use of, you’ll have to buy a new modem and pay the up-front fee again.
Rented modems also get you technical support directly from your Internet service provider. If something isn’t working or your modem dies, they’ll provide free support — well, the “free support” you’re paying for — and replace it for you. If you purchase your own modem from another company, you’ll have to rely on their warranty service if your modem breaks. You may be better off running out and buying a new modem from your local electronics store rather than waiting weeks for the RMA process to get you a working router.
Overall, most people will be better off paying a bit more up-front to buy their own cable modem and avoiding the ever-increasing monthly modem rental fees. On the other hand, if you’re moving or switching to a new Internet service provider soon, renting will probably save you money. Do the math for yourself to decide which is the best option.
Image Credit: Scott Hingst on Flickr, Chauncey Davis on Flickr, Phillip Stewart on Flickr, Joseph Vasquez on Flickr