Time Warner Cable to Raise Modem Lease Fees

If you are a Time Warner Cable internet customer, you can look forward to a price hike on that cable modem lease the company instituted late last year. Customers weren't happy that TWC decided to charge a leasing fee of $3.95 (in most regions) per month which officially kicked in last November. Now customers will see that fee increase about a little over $2. The modem leasing price will jump from $3.95 to $5.99 per month. – roughly an extra $24.48 per year.

According to a Reuters report, the fee is charged to "[s]ubscribers on Time Warner's Cable's most popular Internet plan," and the fee hike does not affect "customers who buy higher-end packages" like its fancy Signature Home package (which rolls in home security options).

ISI analyst Vijay Jayant says that this price hike will help the company generate an estimated $150 million in revenue this year. He also notes that Comcast and Cox charge modem fees of $7 to $8 per month (the fee varies city to city).

Reuters quoted a Time Warner spokesman as saying the fee was raised to cover the "cost associated with providing the modem."

Ars Technica contacted Time Warner, who told it that "We have close to 11 million high-speed customers, most of whom lease their modem from us."

Of course, you could buy your own modem – from an approved list provided by TWC – for between $40 and $130. A lot of customers say that in the long run it will pay for itself within a year because you won't be forced to pay close to $6 a month…

[Full disclosure: the author of this report is a Time Warner Cable subscriber.]

Source: Ars Technica



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  1. 0
    E. Zachary Knight says:

    The modem fee is really to get around restrictions on raising prices. Since the modem fee is not for the actual service, and it is possible to get around it by buying your own, it is not seen as a service fee increase. Works the same on Time-Warner's side, and the same on the customer side. More money for TW and less money for the customer.

    E. Zachary Knight
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  2. 0
    GrimCW says:

    tbh not sure if i should worry.. tbh it was already 5.99 in my area so i kinda shrugged when i got the email.. i'll def be buying my own modem though.

    Not sure how they can justify their reason though, it costs so little for the modem and their charging in excess to what its worth. Topping that they charge you just to get the modem in the first place, and more if you don't turn it in to one of their approved locations when you cancel.


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