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Rent or own your IT? Hidden lessons from the Time Warner modem fee

Posted on by Trevor Jones

CableModem-300x300Time Warner Cable’s recent introduction of a modem lease fee has many homeowners pondering the question of whether to pay the fee or go and purchase their own modem online from the list of approved devices the company offers.  Because I live in an area GWI is unable to serve, I am one of those people.  We did a little shopping and found a DOCSIS 3.0 cable modem on for about $80, and then talked about our options.  We ended up concluding that, much as we hate the monthly bill, four bucks a month in savings almost two years from now wasn’t worth it to us.

I thought it was worthwhile to share our reasons for the decision, because they’re really the same reasons more and more businesses (and consumers) are choosing to rent, not own, much of their IT.

  • Within the 20 months it will take the modem to pay for itself, a newer version might replace it.  I don’t know what the roadmap for DOCSIS 4.0 is or when a Fiber to the Home Internet connection will be available in my town, but given how fast technology is advancing, I wouldn’t bet that I’d enjoy too much savings before I need something new.  This is called obsolescence risk.  If I rent my IT, that risk is on the provider.
  • What if it breaks before I recover any savings? The modem has a 1 year limited warranty.  If there’s a power surge or lightning strike, chances are damages won’t be covered, but if I rent it, that responsibility is on my provider.  Admittedly, modems are fairly simple devices and our previous modem lasted for years.
  • It’s a whole lot easier to go to one place for support.  If we bought the modem ourselves, you can bet that the first time we had problems with our connection, our provider’s support department would blame the modem, and it would be an ugly, painful process to prove that the modem wasn’t at fault.  If the provider owns the modem, it’s a non issue.  Either way our provider has to fix it, and we’ll (hopefully) spend less time dealing with finger-pointing.
  • Money now is worth more than money later.  Enough said.

The bottom line is, why shell out the added up-front cash so we can take on more headaches and more risk when the payback is so far out?  When you get into bigger decisions, like choosing cloud computing for your data backup, business phone system, or email and calendar management, there are many more considerations to think about but these three still apply.

I completely understand that we’re all really bothered by this because it’s a rate hike by another name – akin to increasing the monthly fee for TV and adding channels.  This happens with service providers everywhere and it’s very frustrating for consumers.  If you’re bothered enough by this one to shop around, most of us have at least one alternative provider for broadband that can serve us.  Of course we’d like you to check our GWI Broadband for home or business, but you can also visit the ConnectME Authority’s Broadband Map for a list of providers offering service on your street.


Photo by Paulo Rodrigues

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