Explained: Internet Contracts and Fees
The price that you see advertised by internet service providers is rarely the actual price you actually pay. Some of the fees you are charged are of course legitimate, but, many others are fluff, and you can get rid of them by being smart. Here’s a rundown on the most common types of fees that your internet service provider is likely to charge you:
Contract vs. No-Contract Internet Service
When you sign up for an Internet plan, many service providers will charge you a cheaper price if you sign a one or two-year contract with them. In fact, if you reside in a remote part of the country, you may not get a plan unless you sign a contract. Contract service can sometimes work out a lot cheaper in the long run. This is particularly true for those who bundle their internet service with their TV plan. However, breaking a contract early can cost you hundreds of dollars in early termination fees.
Early Termination Fees (ETFs)
Early termination fees are a fairly standard practice among Internet service providers that have a certain minimum contract length. Essentially, if you agree to stay with the same company for at least 1 year, you will get a discount. If you happen to break the contract, you’ll have to pay the penalty. If you sign a contract that mentions the early termination fee, you really can’t get out of paying it.
Equipment Fees
Most Internet users rent equipment like a modem and/or router when they opt for an internet plan. TV customers also lease things like DVRs, set-top boxes, etc., from the cable company. Each of these items comes with a monthly fee (usually around $5–15). Your internet provider may be putting this charge on your bill as “modem fees,” “technology fees,” etc. If you want to stop paying this fee, we suggest purchasing your own equipment. Most providers will allow this and even tell you what kind of equipment to purchase.
Installation Fees
Depending on your provider and the wiring in your house, you may need the service provider to send their technician to install your Internet service. Internet service providers will charge you installation fees for this service.
