Don't fall for the bells and whistles of a cheap internet promotion. Here's what you should also consider.
The internet is home to heartwarming puppy bus rides, thrilling streaming shows and hilarious memes. But we aren't so fond of our internet service providers. ISPs are at the bottom of the pile when it comes to customer satisfaction -- even lower than the Department of Motor Vehicles, according to the American Customer Satisfaction Index.
One big reason is the often exorbitant and misleading fees. We get lured by dazzling promotional rates -- only $20 a month! -- and therefore think we know what we're going to be paying. But inevitably, it always ends up being more expensive than expected.
Consumer Reports released a study late in 2022 that found deep confusion among internet subscribers, and hidden fees made up a large chunk of that mixup. As the study put it, "unavoidable fees are especially problematic because consumers may believe they are government-imposed when, in fact, many are company-imposed and distinguished from the core service price." So your $20-a-month rate becomes more like a $45 or even $55 monthly charge.
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What are your options? What should you do? Your most important tool is knowledge. If you understand where these fees are coming from, you'll have a better chance of negotiating a better price with your ISP or finding a different provider with more competitive (and transparent) rates. Let's take a look at what you can expect to find beyond those tantalizing promo rates.
Let's stick with the premise that an internet provider has presented you with a $20 promotional rate. That sounds like a good deal, right? Well, it could be. However, you need to know that most ISPs charge one or two additional fees at the very start of service.
First, you'll encounter an installation fee, which covers the cost of having a technician visit your home. This typically ranges from $45 to $100. The good news is some providers give you the option to choose self-install, which usually involves mailing out a kit or package to you (or, in some cases, you can pick it up at a store location). This is usually much cheaper, in the $15 to $35 range. The even better news is that some providers not only provide self-install for free, but they'll also waive the professional installation fee if you sign up online.
Finally, in addition to the installation fee, many providers will also tack on a one-time "activation fee," which can be anywhere from $10 to $80. It's basically a charge for setting up your account. Don't be shy about asking if this fee can be waived.
OK, you've gotten past the opening fees and are ready to settle into that nice $20 monthly rate. Not so fast. Another item to look out for that can be tacked onto your monthly costs is an equipment rental fee. This is a charge for using the provider's equipment -- usually a modem, router or gateway (a combination of both). You can expect to pay between $5 and $15 monthly for this rental fee. While some providers allow you to skip this charge by using your own equipment, some ISPs (particularly satellite internet providers) still don't allow you to opt out. So, if you're not careful, your $20 rate could go up to $35 a month.
Thankfully, more providers are moving away from this additional charge. Both AT&T and Verizon Fios -- which previously charged $10 and $15 a month, respectively, on equipment -- changed course in 2022 and removed those fees. Now, both providers include the equipment rental in the flat monthly cost. I suspect they may have been nudged by the aggressive, competitive approach of T-Mobile Home Internet, which took off in 2022 by leaning into the idea of "internet freedom" with its all-inclusive price. It wasn't the first or only provider to include an equipment rental in the monthly price, but it certainly turned up the volume on it.
And if all else fails, you can skip this charge by buying your own modem and router.
Another tack-on item you need to evade, if possible, is the paper billing fee and automatic payment mode. Nearly every ISP includes these two elements as discounts. For example, with the $20 promotional rate, it's assumed that you'll nix paper billing and use the automatic payment mode (necessitating having a credit card on file). However, if you decline these (or fail to opt-in), you'll be charged between $5 and $10 monthly. This is a fairly easy fee to avoid, but you must still know it's lurking. Otherwise, your $20-a-month rate could jump up to $30 monthly.
Much like any other utility or service, you must pay your bills on time to avoid late payment fees. Those can add anywhere from $5 to $35 to your monthly bill. But depending on the type of internet service or plan you sign up for, you also need to be aware of other potentially stiff penalties.
For example, you signed a term agreement if your $20-a-month plan required you to ink a two-year contract to lock in that low price. If you decide to bail on your service before those 24 months are done, you'll face an early termination fee. Depending on the provider (and how many months remain in your contract), ETFs can run anywhere from $15 to a staggering $400. That's rough. Thankfully, many competing ISPs also offer contract buyouts, where they'll pay your ETF if you switch to their service. Still, if possible, it's easier to avoid signing such an agreement in the first place.
Similarly, if the $20 monthly rate comes with a data cap, you must stay within the specified limit or incur overage data charges. As you can imagine, the cost varies per provider, but generally, you'll see a ballpark charge of an additional $10 for every 50GB over your data limit. Most providers will limit the total monthly overage charge to $100, but be sure to read the fine print -- we've seen some that go up to $200.
We've talked generally about some of the hidden fees in your internet bill. Let's look more specifically at the providers CNET has covered thus far.
|Provider||Activation fee||Installation fee||Early termination fee||Monthly equipment rental fee||Monthly data overage charge|
|Astound Broadband||$10||$80||None||$7-$16 (depending on your area)||None|
|AT&T||Fiber - None; DSL - $49||$99||None||None||Fiber - None; DSL - $10-$100|
|CenturyLink||$20||$99-$125||None||$15; None for gigabit customers||None|
|EarthLink||$80||$40-$80||Up to $200||$13||None|
|HughesNet||$25||$99||$100-$400||$15 (or one-time payment of $450)||None|
|Kinetic by Windstream||$50; None for gigabit customers||None||$7-$10 (skippable)||None|
|Mediacom||$10||$25-$45||None||$13 (skippable)||$10 for every 50GB over your cap|
|Nomad Internet||None||None||None||None ($299 one-time fee)||None|
|Rise Broadband||None||$150||$125-$250 in some areas||$12 (skippable)||$8 for every 10GB over your cap|
|Starlink||None||None||None||None ($599 one-time purchase)||$1 for every 4GB over 1TB|
|T-Mobile Home Internet||None||None||None||None||None|
|Verizon 5G Home||None||None||None||None||None|
|Viasat||None||$100||$15-$315||$13 (or one-time payment of $300)||None|
|WideOpenWest||$10||$50; none for self-install||None||$14 (skippable)||$10-$50|
There are over 2,000 different ISPs nationwide, so we're not about to provide an exhaustive list of every provider-specific fee. However, this can serve as an example of just a few different "junk fees" that customers will encounter across the US and give you a good idea of some of the things you should be aware of.
Astound Broadband, which offers very competitive promo rates, has an additional monthly fee called a Network Access and Maintenance Fee. This $10 monthly charge "helps defray costs associated with building and maintaining our fiber-rich broadband network, as well as the costs of expanding network capacity to support the continued increase in customers' average broadband consumption. This fee is neither government-mandated nor a tax, fee or surcharge imposed by the government; it is a fee that Astound Broadband assesses and retains."
AT&T has an additional monthly charge called a State Cost Recovery Charge that applies to Nevada, Ohio and Texas customers. The fee varies based on location-specific information and is "collected by AT&T from its customers to recover costs AT&T pays in taxes and required payments levied by state governments. These charges are not taxes or surcharges which the government requires AT&T to collect from its customers."
CenturyLink features an Internet Cost Recovery Fee (or Broadband Cost Recovery Fee, in some areas). This $4 monthly fee ($2 in Washington state) "helps defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers' average broadband consumption."
Metronet charges $12 a month on top of your regular rate for a Tech Assure Program Fee. "Tech Assure is a required fee that covers any service calls or repairs to all Metronet-owned equipment. If it's our equipment or our wiring, inside or outside your home, we'll fix it or replace it, and make sure it's working optimally at no additional cost to you."
Optimum has an additional monthly charge of $4 for what it calls a Network Enhancement Fee.
Rise Broadband places a Carrier Cost Recovery Fee of $7 monthly on top of your regular monthly charge.
Additional help is on the way as the Federal Communications Commission announced in 2022 that it's moving forward with the idea of uniform broadband labels -- a type of internet nutrition label, if you will -- that would more clearly display what consumers will pay for their internet service. But until then, take time to review your bill, ask your provider questions and don't be afraid to negotiate a better deal. Our broadband options are slowly growing, and with increased choices comes more consumer empowerment.
A recent Consumer Reports study found that the median cost of internet service was $75 a month, and half of the households surveyed paid between $60 and $90 monthly. So, it's safe to say you could expect to pay at least $60 each month for your internet service. That said, in 2022, many providers across the US committed to offering plans of at least 100Mbps for $30 or less. If you don't have many people in your household and don't need gigabit speeds (and many of us still don't, even though we love those super-fast plans), you may be able to find a plan for around $50 a month.
The answer to that question depends on where you live and the internet connection types available in your area. But generally speaking, cable and fiber will duke it out for the cheapest internet. In a given area, you may find that a cable internet provider offers the cheapest plan available -- say, a $25 a month offering from Xfinity. However, fiber plans from providers like AT&T or Google Fiber will frequently offer better value. For example, Google Fiber's cheapest plan is $70 a month. No match for Xfinity, right? But Google Fiber's $70 plan comes with gigabit speed, so the value is 7 cents per Mbps. Xfinity's cheaper plan is 75Mbps, which comes in at approximately 33 cents per Mbps.
That's a common practice, certainly. Internet providers often lure you in with an enticingly low price for the first year and then hit you with a steep increase. But that's changing. The rise of 5G home internet providers, like T-Mobile and Verizon, has spurred increased competition. Also, some providers (including AT&T, Spectrum and Verizon Fios) don't do promo prices but instead offer gift cards or other interesting perks (like discounted streaming services). Not to be outdone, other ISPs (including Optimum, T-Mobile Home Internet and Verizon 5G Home Internet) offer price-lock guarantees.