Cable Modems: Buy vs. Rent?

By Joseph Moran | Posted October 19, 2007

If you get your Internet access from the cable company, it probably supplied you with the cable modem you're using right now. If so, the company's probably charging you a fee to rent that small piece of equipment. The monthly fee for a cable modem rental is typically about $3. While that may not seem like a lot of money, over time it can add up — three bucks a month means you've paid $36 after a year, $72 after two, and $108 after three.

But you needn't necessarily resign yourself to paying cable modem rental fees in perpetuity. Instead, you may be able to save yourself some money over the long run by buying your own cable modem. Since a purchased cable modem will provide exactly the same features and performance you get from a rented one, the rent vs. buy decision often has more to do with financial rather than technical considerations.

What They Do and How They Work
First, some quick background on cable modems: The networks of most major cable providers are based on a standardized technology called DOCSIS (Data Over Cable Service Interface Specification) that was first released back in 1997 and has been revised several times since.


A variety of familiar vendors — including D-Link, Linksys, Motorola, RCA and several others — manufacturer cable modems based on the DOCSIS specification, and these devices are commonly available for purchase in retail electronics stores, which gives local cable companies a venue in which to sign up new customers for Internet service.

But although the cable companies don't usually go out of their way to make you aware of it, most also allow existing customers to purchase their own cable modems. You can determine whether your cable company permits this by calling the customer support line, and if it's not already itemized on your bill, you can also check what your monthly rental fee is while you've got them on the phone.

You may also want to verify that your cable provider supports DOCSIS equipment. If it does, compatibility with a store-bought cable modem is all but assured, because all DOCSIS-compliant cable modems must be certified by CableLabs, the cable industry's research and testing group. Cable modems sold today support DOCSIS version 2.0 and are backward compatible with earlier DOCSIS versions, which are what many cable companies are still using on their networks. (Some cable companies maintain their own list of supported or recommended modems — for example, Comcast's can be found here.

Once you've determined that buying a cable modem is technically feasible, the next step is to decide whether doing so makes financial sense. This will largely depend on what your current rental fee is and how much you decide to pay for a cable modem. If you buy one at a local retailer, for example, it will typically set you back anywhere from $80-$100. At those prices, it would take between two and three years (assuming a $3 monthly rental charge) for you to reach the point where you've recouped the cost of the modem and can start enjoying the savings.

If that long of a time frame doesn't seem very compelling (and admittedly it isn't), here's a tip. When you go shopping for cable modems online, you'll often find them on sale for much less — more like $50 or $60 — which will cut your break-even point down closer to around 18 months. Moreover, cable modems are frequently discounted and/or available with manufacturers rebates, so by keeping your eyes open and timing your purchase accordingly, you can reach break-even in a year or less. Case in point — as of this writing, D-Link's DCM-202 cable modem is available from a major online vendor for $50 and carries a $20 rebate. With an effective price of $30, the cable modem will pay for itself in a mere 10 months.

What Could Go Wrong?
So what are the potential pitfalls of owning rather than renting your cable modem? First, if your self-owned cable modem fails, your cable company won't be responsible for repair or replacement. Also, if your cable provider eventually introduces enhancements that require new hardware, you'll be on the hook to purchase it yourself if you want to take advantage of them. The odds of this happening are fairly remote, however, given that it would require cable companies to upgrade equipment for their entire customer base, which they'll not be eager to do.

If you do decide to buy a cable modem, when you get it be advised that you can't just plug it in start surfing. Before it will work, you'll need to contact the cable company and inform them of the device's MAC address so they can authorize it for your account. Also, be sure to return your rented modem promptly, because the rental fee won't go away until you do. Finally, remember to monitor your bill to confirm you receive the proper credit.

Adapted from PracticallyNetworked.com, part of the EarthWeb.com Network.

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