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Avoid the Modem Rental Trap


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Many of us have struggled with this item at the time we are shopping for internet service: the modem. The idea of a non-technical person making a determination. The typical mindset has always been around, rent along with the service provider. Now internet providers are also including ‘whole home internet’ or Managed Wi-Fi services, providing the modem and Wi-Fi router. All at added expenses.

However that bundling, while making it easier in appearance make no mistake is a cash-grab by the typical ISPs. Here we’ll discuss how to avoid the trap and not fall for the temptation of ‘promised simplicity’. Shall be said though, it easier to work around with Cable Internet than with Fiber Internet. In a certain setup with Fiber Internet, such as in a Condo you may not have an option at all as have to use the equipment provided to the consortium.

Having said that let’s review the economics of modem rentals, and why they are so lucrative to the providers.

For example, currently Rogers modem rental is $10 per month, if we take into consideration the average person will keep their internet connection for 3 years, the modem rental over 36 months will end up costing $360.70 adjusted by inflation.

On the other side, Bell calls for a “one-time modem fee” which currently is $199.95. Which is credited back for new customers, so after the 2nd year you’ll start footing a bill of about $200. In three years of service, you’ll have paid about $400 in the concept of ‘modem rental fees’ to Ma Bell.

True to be told, the only one that gains with the modem rentals are the providers, as typically these are paid for 4 to 5 times through the customer’s lifetime.

Here we list some of the alternatives to avoid getting into the ‘modem fees’ trap.

Buy the Internet Modem

Many providers will offer the choice to buy the hardware from them. Sometimes that can be the best option as if you keep the service typically a one-time expense is lesser than years of rental fees. In some cases, more typical with Internet Cable Modems you can find them at other stores. For example, the same Rogers modem but buying out of Amazon is $94… shall we say you can save $273.20 or $91 per year. Another place where you can find internet modems is a computer store Newegg.

Use a Provider with Free Modem Rental

Some providers will give you the modem for free. Yes, that is right. A Free Rental. The advantage is that if something ever happens to the modem you can count.

Some providers with Free Modem Rentals

Note: Cogeco, Shaw & Videotron include the modem rental on their internet plans. Comwave offers to include the modem, however, an advance Security Deposit is required to cover the cost of the modem. Thus making it not a ‘true Free’ rental.

Use a Provider that Support BYOD

Not all, but is increasing in popularity, but slowly internet providers are supporting BYOD (or more like BYOM)

Note: Telus offers support for Bring Your Own Modem.

While it is convenient to have all internet services bundled up, one has to be aware of the price to pay for such a perceived convenience.

The discounts for bundling services are no match for Free Modems or ultimately, using your own.

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