Archive: Business & Technology

Time Warner Cable differed from competitors like Comcast in that they provided a free cable modem to Internet customers.  At least they did until yesterday.  Some Internet customers were upset when they received a postcard last week saying that beginning November 1 there would be a monthly rental fee of $3.95 for cable modems.

"You do have a choice when it comes to your cable modem and the monthly lease fee," the card explained.  "You can opt to waive the fee and purchase your own modem."  Many customers did just that.

It has been reported that Time Warner stands to make between $300 million and $500 million per year from cable modem lease fees.  Some reports claim this is why the company has made it so difficult to enable modems you purchase.  Across the country, customers waited hours on hold trying to enable their new equipment, or in line trying to return it.  If it wasn't a conscious business decision, the company clearly was not ready to handle the volume of customer service calls the treat of an additional fee scheduled to begin just over a week after the notification was received would generate.

Nobody wants to pay more to get the exact same service they have been getting since the service was established.  The company is spinning it as a way to continue to pay for new and replacement equipment.  Detractors are spinning it another way: you have to think that a company as successful as Time Warner had already included the cost of equipment in the monthly Internet service charge, so this is actually a four dollar rise in the cost of Internet service, or approximately 8% for accounts without promotional pricing.  Other cable companies have charged an equipment rental fee for years.  Comcast currently charges $7 per month to lease a cable modem.

For cable customers the choice of whether to purchase a modem or lease one comes down to dollars and convenience.  The dollars part is simple arithmetic.  When I got the card mid-last week I did the math: at $3.95 per month a purchased modem would pay for itself in 15 months.  As I recall, the cable modems I have had have lasted at least three to six years each, so purchasing is the best choice.  After 15 months I will save $47.40 per year.

The down-side is service.  If my Internet goes down, is it the cable or is it my equipment?  Will I be charged for a service call if it turns out to be my equipment?  And if it takes a few days to get a new modem attached to my account plus however long it takes me to purchase a new one, how long will I be without Internet if my equipment fails?  By buying my own equipment have I bitten off my cable modem nose to spite my Internet service face?

Then again, we had a cable failure last month and it took Time Warner three days to get a repairman here, during which time we were without Internet and television service.  At that time all our cable equipment was owned by Time Warner (I don't think I'll see a credit for those three days without service).  So while it involves some annoyances and a give and take between price and what is admittedly rarely needed service, I opted to buy my own cable modem.


I checked out Time Warner's short list of approved cable modems (only three models are allowed for my level of Internet service), and ordered one on Amazon.  It arrived Saturday.  Following Time Warner's instructions I unplugged Time Warner's modem, plugged in my own modem, then called the company to provide the MAC (Media Access Contro) Address of my new equipment so they could pair it to my account.

I was on hold for nearly an hour, during which time I learned that there are a variety of products I should buy from them, over and over again.  The man whose recorded voice told me this was annoyingly perky about it as he repeated his message time and time again with periodic interruptions from a woman's voice that told me how important my call is to Time Warner.

I finally got to talk to a very nice lady, who told me, alas, she could not take my modem information and would I mind if she put me on hold while she connected me to the proper department?  She said it wouldn't be another hour.

It was actually about two minutes, at which time I got a somewhat confused representative who led with, "If you are not in Central New york it could take four days before your cable modem is enabled."  I was pretty sure they hadn't moved Lansing out of Central New York, and gave him my information.  He told me he had to send an email to some department that would actually enable my modem, and I should plug the old modem back in.

"When it stops working, plug the new one in," he said.

By Tuesday I was getting impatient, because I wanted to return the company's modem before they started charging me for it.  I don't know what made me do this, but I logged into my online Time Warner Cable account, where I found that the equipment in my house is not only listed, but the system actually tests to see if it is working correctly.  It lists the equipment by serial number, and in the case of the cable modem, MAC Address.  I checked the label on the bottom of my new cable modem -- it was the same number as was listed on the Web site!

Should You Buy Your Own Cable Modem?
Pros	Cons
Save $47.40 per year Some report new equipment is faster	Replacing modem may mean days without Internet At least for now, long phone waits to pair modem with account If you upgrade later to Turbo the modem you bought for Lite, Basic and Standard Service Plans will not work

That didn't make sense.  The support guy told me that the old modem wouldn't work when the new one was enabled -- that's why I had waited so long.  In fact a lot of what he told me was confusing and contradictory.  I wondered whether that was because of the onslaught of customers in various states of annoyance he had to deal with.

But I decided to try it out.  I unplugged the old and plugged in the new.  There are three cords that are easy to tell apart, so it's not rocket science.  Of course there is the cable itself, then an ethernet cable that connects the cable modem to your router or computer, and the power cord.  It is not always necessary, but it can be helpful to reboot the computer and the router if you have one.  Then you wait for it all to come back.

After a short interval I checked to see if my Internet was working: it was.  I don't know why the old cable modem still worked if the new one was enabled.  The guy on the phone was clearly wrong about the old one losing its Internet connection.  After a little more testing to make sure email, FTP and other Internet services were working OK, I uncoiled the old device's power cord from the tangle of wires behind my desk, and because Hurricane Sandy wasn't doing what we all thought she was going to be doing, I drove down to Time Warner.

I was the only person in a line of about a half dozen people who was returning a cable modem.  The rest were there to pay bills or sort out billing issues.  Another nice lady took my modem and gave me a receipt for it.  I asked her whether a lot of people had been returning cable modems.  She said a sprinkling, not very many.

Some customers are saying that the newer equipment they bought is delivering slightly more speed, an added bonus to the lease fee savings.  I didn't conduct speed tests, so I can't speak to that except to say that anecdotally my connection is at least as good as it was before I switched.

Evidently my experience wasn't nearly as bad as that suffered by Time Warner customers in bigger cities.  This week's news has been loaded with articles complaining about multiple support calls, and waiting in line an hour to return the cable company's modems.  Some frustrated customers are claiming the company is charging the fee out of spite, and have made switching to a modem you buy as hard as possible.  It is more likely that the company didn't think it through, and thus did not prepare for the onslaught of support calls customers eager to enable their own cable modems would generate.  Time Warner representatives say the lease fee allows the company to maintain the equipment and pay for cable modems that need to be replaced.  The estimated additional revenue of more than $300 million per year is certain to please Time Warner stock holders.

It may be worthwhile for Tompkins County customers who want to take the purchase option to wait a little while.  Theoretically the amount of time you spend on telephone hold will be reduced once the onslaught of customers opting out of leasing settles down.  The waiting in line to return your cable modem piece just doesn't seem to be that bad in Ithaca, and the people who help you there have been, in my experience, cheerful, knowledgable, and eager to help.

Was it the best support experience possible?  No, but it wasn't intolerable, except for the phone wait.  I was certainly given some misinformation that could have led to being charged if I hadn't figured out my new modem was enabled before the starting date for the lease fee.  In the end the switch worked fine, and I am happily accessing the Internet with my own equipment, while happily not paying more for the same Internet experience.

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