How to lower your internet service bill

You already know the scenario. you open the cable or phone bill to see the long list of fees and any surprise price increases that may or may not have been added this month.

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Despite reading about the ways you can save money by leaving your cable company behind, you may not have the bandwidth to calculate the cost-benefit analysis and subscribe to multiple streaming services.

What is a modem and a router, and why do you need both?

modems

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

For example, if you’re paying for the Internet through a cable company, you’re connecting the cable directly to a modem, and then connecting your devices, such as computers and laptops, via Ethernet cables to the modem.

routers

Routers are usually sold separately because they are not absolutely necessary to get internet. However, you need to connect the modem to a router to use more ports than a modem could allow, and more importantly, routers enable Wi-Fi technology.

The router connects to the modem via Ethernet and you can then connect your Wi-Fi devices such as mobile 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 mix of modem routers below.

The router connects to the modem via Ethernet and you can then connect your Wi-Fi devices such as mobile 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 mobile phones and tablets to the Internet without having to connect them to the modem via an Ethernet cable.
(cyber boy)

Stop renting a high-speed modem

A simple, often overlooked way to lower your internet bill can be as easy as buying your own equipment. According to Analysis by New America (a group of experts)most Americans in 2020 paid an average of up to $10 or more to rent a modem from their Internet provider.

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

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Why buy your modem and router?

Clearly, it’s easier to have the cable provider’s technician show up at your home with all the equipment to connect. Taking the extra step to find out if you can buy and use your own may be worth it. Not only can you save money, here are some additional hidden benefits of buying your own equipment:

  • Set price. What you paid to buy the equipment is the price you pay. There are no surprises since your ISP can increase the equipment fee, as well as your service fee, as much as they want.
  • Save on taxes. Depending on your state, while you may not be taxed on the cost of paying for Internet service, you may be taxed on the equipment you rent per month. So not only are you paying a monthly fee, you’re also paying a monthly equipment tax.
  • Keep your equipment. If you’re lucky enough to live in an area with a lot of competition for Internet service providers, if you buy your own modem or router (as long as the technology is compatible), you can keep your equipment after your contract with the old provider ends. and take it to use with another. If you rent your equipment, you will need to return it by mail or deliver it. Worse yet, you may be charged high fees if something goes wrong and your equipment is deemed broken, damaged, or unreturned.
  • Better technology. Cable companies and many other Internet service providers don’t necessarily provide you with the latest and greatest modem or router. And it is doubtful that they will give you the best price. 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 shop around for the best price. Just make sure that any modem or router you buy is compatible with the internet service provider you’re using.
  • Save on installation fees. While there are some opportunity costs to setting up your own team, once you’ve got it set up, you’re generally good to go for the long haul. IF you rent your modem or router, setup fees are usually added by your provider. Typically, if you’re using your own equipment, you’ll probably be forced to pay an activation fee, but you can potentially save on paying an installation fee.
  • More control. While Internet providers mean well, many of the modems and routers they sell to their customers often have limited configurations and features that they dictate. If you’re relatively knowledgeable or just want the option to play with all the settings and not just the ones your ISP deems accessible, you may want to purchase your own modem and router.
Routers with network cables.

Routers with network cables.
(Jaap Arriens/NurPhoto via Getty Images)

What modems and routers should I buy?

Have you checked with your internet service provider and you know you can buy and use your own equipment with your service. Now the question: what to buy?

Depending on the type of service you’re purchasing, you may need to purchase two pieces of equipment: a modem and possibly a Wi-Fi router.

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How to choose the best modem

The modem is crucial to your Internet service. It’s what brings your Internet service provider’s Internet connection into your home.

Important features in your next modem

  • Compatibility. Double check to see which providers provide service in your specific location, and check to see if a) they allow you to buy and use your own equipment, and if so, what kind of technology is needed to optimize the service you’re paying for.
  • Connection type.
    Cable: DOCSIS allows data transfer over coaxial cables. Fiber Optic – Just like its name, it uses fiber optic cable to transfer data. DSL – Uses your existing phone jack to transfer data.
  • Cable: DOCSIS allows data transfer over coaxial cables
  • Fiber Optic – Like its namesake, it uses fiber optic cable to transfer data.
  • DSL – uses existing phone jack to transfer data
  • Velocity. Usually measured in megabits per second (Mbps), the higher the Mbps, the faster your Internet connection.
  • Broadband. Usually measured in megabits per second (Mbps), this is the measure of the maximum amount of data that can be transferred at any given time. Example: With a 25 Mbps connection, you typically get a maximum bandwidth of 100 Mbps.

I was renting a DOCSIS 2.0 modem from my cable company when I realized that paying for my own DOCSIS 3.0 modem, while more expensive up front, would save me recurring monthly fees and taxes. Even better, my own new modem will help me maximize the Internet speed I was paying for.

For a list of my top 6 picks for modems Click here.

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