Time Warner Cable, the big broadband and cable provider, is planning to start charging customers a monthly fee of $3.95 for renting a cable modem from the company. It said in notifications mailed to customers this week that the new fee would go into effect over the next two months.
Internet customers who want to avoid the monthly fee can purchase a modem of their own and have Time Warner Cable activate it. The company has published a list of approved modems on its Web site. The compatible modems cost between $50 and $137 on Amazon.com.
Time Warner Cable lists two main types of modems that people can buy: Docsis 2.0, which works with lower-end, slower Internet services, or Docsis 3.0, for the more expensive, faster packages. For budget-conscious consumers who buy the $50 modem, it will take a year to break even.
But many consumers who are less tech-savvy are unlikely to go through the hassle of purchasing and installing their own modem, so the policy change will probably lead to a big boost in revenue for Time Warner Cable.
The company said the new fee was necessary to make up for the cost of distributing and replacing cable modems over time.
“As we continue to deploy more and more cable modems, many of these modems need servicing or replacing, get damaged and some are not returned,” said Justin Venech, a spokesman for Time Warner Cable. “The monthly lease charge will allow us to service or replace the equipment as needed and helps provide a better user experience.”
Though most Time Warner Cable customers have not had to pay to rent modems in the past, these types of leasing fees are a common practice among Internet providers. Comcast, another broadband provider, charges a modem rental fee of $7 a month.