Time Warner Cable Increasing Modem Rental Fee

Subject: Editorial | July 30, 2013 - 07:08 AM |
Tagged: time warner, Internet, cable modem, cable isp

According to the Consumerist, cable ISP Time Warner Cable is increasing its modem rental fee to $5.99 per month. The company initially instituted a $3.95 rental fee in October of last year, and it is already ratcheting up the fees further for the same hardware people are already using.

The new rental fee will be $5.99 per month for most accounts (it seems the SignatureHome with TV is exempted from a rental fee), which works out to $71.88 per year. For comparison, the previous $3.95 fee would be $47.4 a year. As such, Time Warner Cable is looking at a healthy increase in revenue from the higher fee, which ISI analyst Vijay Jayant estimates to be around (an extra) $150 million according to Reuters. That’s a lot of money, but even zooming in to the per-customer numbers, it is a large increase. In fact, with the $71.88 total per year in rental fees for the modem, it is now cheaper to buy a new DOCSIS 3 modem outright.

For example, the Motorola SB6121 is on TWC’s approved modem list and is $69.45 on Amazon which would save you about 20 cents a month in the first year, and whatever the rental fee is in later years. I have been using this modem (albeit on Comcast) since February 2012 and I can easily recommend it. Things can look even better in favor of buying your own modem if you are on a slower tier and can get by with a DOCSIS 2 modem, some of which can be purchased for around $40 used.

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Time Warner Cable further claims that it has increased speeds on its most popular internet service tier and added additional Wi-Fi hotspots for customers over the past year alongside the fee increase announcement, but unless you are on its “most popular” tier, its hardly enough good news to outweigh the fee increase and is likely to only further the outrage from customers who have already attempted class action lawsuits over the $3.95 fee.

Fortunately, there are options to bring your own modem and it is a simple process if you cannot justify the fee increase out of principle or just want to save a bit of money.

Source: Consumerist