How to lower your Internet service bill

You already know the scenario. You open your cable or phone bill to see a long list of charges and any price increases that may or may not have been resolved that month.

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Despite reading about ways you can save money by leaving your cable company in the dust, you probably don’t have the bandwidth to learn a cost-benefit analysis and subscribe to multiple streaming services.

What is a modem and router and why do you need them?

modems

Modems offer similar and different functionality than routers, which is why most consumers buy both. Most cable companies and Internet providers provide connections from their networks to your home through a modem.

For example, if you pay for internet through a cable company, you plug the cable directly into a modem and then connect your devices such as computers and laptops via ethernet cables to the modem.

routers

Routers are usually sold separately because they are not strictly necessary to connect to the Internet. However, you need to connect the modem to a router to use more ports than the modem would allow, and most importantly, the routers are Wi-Fi enabled.

The router connects to the modem via ethernet, and you can then connect your Wi-Fi devices such as cell phones and tablets to the internet without having to connect them to the modem via an ethernet cable.

There’s a more in-depth exploration of the pros and cons of having a modem router combo below.

The router connects to the modem via ethernet, and you can then connect your Wi-Fi devices such as cell phones and tablets to the internet without having to connect them to the modem via an ethernet cable.

The router connects to the modem via ethernet, and you can then connect your Wi-Fi devices such as cell phones and tablets to the internet without having to connect them to the modem via an ethernet cable.
(CyberGuy)

Stop renting a high speed modem

A simple, often overlooked way to reduce your internet bill can be as easy as buying your own equipment. According to a New America (a think tank) analysis, most Americans in 2020 would, on average, pay $10 or more to rent a modem from their internet provider.

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While not all providers will allow you to purchase and use your own equipment, some will. Buying a WIFI modem and router can not only help you save money in the long run but also benefit you in many ways.

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Why buy modem and router?

Obviously, it’s easier to have a cable provider’s technician show up to your home with all the equipment to get you online. Taking the extra step of seeing if you can purchase and use your own may be worth the effort. Not only can you save money, here are some additional hidden benefits of buying your own equipment:

  • Put a price. What you paid for the equipment is the price you pay. There are no surprises as your ISP can raise equipment fees, just like service fees, as much as they like.
  • Save on taxes. Depending on your state, while you can’t be taxed on the cost of internet service, you can be taxed on the equipment you rent per month. So not only do you pay a monthly fee, but you also pay a monthly tax on the equipment.
  • Keep your equipment. If you’re lucky enough to live in an area with a lot of competition for ISPs, if you buy your own modem or router (as long as the technology is compatible), you can keep your equipment after you end your contract with one old provider and use it with another. If you rent your equipment, you will have to mail it back or have it delivered. Even worse, you can be charged exorbitant fees if something goes wrong and your equipment is deemed broken, damaged, or not returned.
  • better technology. Cable companies and many other ISPs don’t necessarily set up the latest and best modem or router. It is doubtful that they will give you the best rate. If you end up buying your own equipment, not only can you find out which features are most important to you, but you can also research the best price. Just make sure that the modem or router you buy is compatible with the Internet Service Provider you are using.
  • Save on installation fees. Although there are some opportunity costs to setting up your equipment, once you have it set up it is generally a good idea to keep it running for the long haul. If you rent the modem or router, the installation fee is usually charged by the service provider. Usually, if you use your own hardware, you will likely have to pay an activation fee, but you can save on paying the installation fee.
  • More control. While internet providers mean well, many of the modems and routers they sell to their customers are often limited in the settings and features they dictate. If you’re relatively knowledgeable or just want the option to tinker with all the settings and not just the ones your ISP considers handy, you might want to buy your own modem and router.

What modems and routers should you buy?

You’ve checked with your ISP and you know you’re allowed to buy and use your own devices with their service. Now the question: what to buy?

Depending on the type of service you buy, you’ll likely need to purchase two pieces of equipment: a modem and potentially a Wi-Fi router.

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How to choose the best modem

The modem is necessary for your internet service. This is what brings the internet connection from your internet service provider to your home.

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Important features in the upcoming modem

  • Compatibility. Double check to see which providers serve your specific location and see if a) they allow you to purchase and use your own equipment, and if so, what kind of technology is needed to improve the service you’re paying for.
  • connection type.
    Cable – DOCSIS allows data to be transmitted over coaxial cables Optical fiber – Like its namesake, fiber optic cable is used for data transmission DSL – It uses existing telephone jack for data transmission
  • Cable – DOCSIS allows data to be transmitted over coaxial cables
  • Optical Fiber – Like its namesake, optical fiber cable is used to transmit data
  • DSL – Uses the existing telephone socket to transmit data
  • Speed. Usually measured in megabits per second (Mbps), the higher the Mbps, the faster your internet connection.
  • bandwidth. Usually measured in megabits per second (Mbps), this is a measure of the maximum amount of data that can be transferred at a given time. Example: With a 25Mbps connection, you typically get a maximum bandwidth of 100Mbps.

I was renting a DOCSIS 2.0 modem from my cable company when I realized that paying for my DOCSIS 3.0 modem, although more expensive up front, would save me from recurring monthly fees and taxes. Even better, my new modem will help me increase the internet speed I’ve been paying for.

For a list of our top 6 modem picks, click here.

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