ISP Charging Fee for Customer-Owned Equipment

[LazyAK47]

Frontier is charging customers of it's broadband service for usage of customer-owned equipment.

https://arstechnica.com/information-technology/2019/07/frontier-customer-bought-his-own-router-but-has-to-pay-10-rental-fee-anyway/

"The company confirmed that it refuses to stop charging the Wi-Fi router rental fee even when customers use their own router and claimed it does so in order to cover higher support costs for customers..."

 

When I first started getting internet service on my own during college, one of the first things I did was buy my own modem/router so I could avoid the monthly rental fee for ISP-owned equipment. I even purchased one for my parents because, in the long run, it was MUCH cheaper to own than to rent. I think in most cases for everything, owning is cheaper than renting, at least in the long run. And my parents and I have never had any problems using equipment that we owned, as long as the equipment was compatible with the service we were using. While I somewhat understand Frontier's justification for charging the monthly fee as servicing equipment that is not "specifically designed to work with our service," I think it opens the door for other companies to do the same while not running afoul of the FCC. I don't believe I should pay fees for using my own property in this context. The current FCC does not seem like it would push back against companies in favor of consumers.

 

I know there are similar situations that are readily accepted in today's society. Such as, corkage fees in establishments that serve alcohol or maintenance/registration costs for other things we own. But this fee from Frontier seems egregious because a lot of modem/routers currently sold are advertised as compatible with various ISPs. I can't imagine that "higher support costs" for customers that don't use ISP-provided equipment actually exists or has an actual bottom line effect. Will fees like this become the new normal?

 

Edit: In a lot of areas, such as in my college days, the variety and competition of ISPs are very limited...so what kind of options would people actually have to avoid fees and, as people say, "vote with their wallet"

 

Edited July 3, 2019 by LazyAK47
Additional comment

[BrinkGG]

18 minutes ago, LazyAK47 said:

-snip-

I'm not gonna lie, this isn't as bad as it seems. BUT it is extremely situational. 

We have two options at my current house; Spectrum and Frontier. And while Spectrum does not charge for rental equipment that I'm not using (I have my own modem, router, firewall and access points), Frontier does. 
BUT, Spectrum will not allow us to have an internet speed above 50/10 unless we also bundle it with cable and phone. So that ends up being about $125/mo with 100/10, analog phone, and the base cable package. 

\  / 

Frontier however, offers 200/200 for $60/mo by itself. Sure the rental fee is $10/mo on top of that, but that is still a MUCH better deal in my eyes then Spectrum's offer. Even adding a home phone line is only another extra $10/mo, and adding cable is $45/mo, but in total, that's still the same cost as spectrum's much slower service. Plus I never actually use cable or the home phone, so Frontier is a much more enticing offer to me.

 

Also, his argument that Verizon "forced" Frontier on him is bit ridiculous. the US Gov't forced Verizon to sell a segment of their market in fear that Verizon would become a monopoly. So they sold the California market to Frontier and handed over all of the equipment, trucks, staff, and customers with it.

 

EDIT: I also forgot to mention, Frontier is completely transparent with the fees as well. If this customer actually asked about the rental fee, they would have told him it is not removable. I called about 1.5-2 months ago and asked, and they confirmed this for me. 

[LazyAK47]

5 minutes ago, BrinkGG said:

I'm not gonna lie, this isn't as bad as it seems. BUT it is extremely situational. 

We have two options at my current house; Spectrum and Frontier. And while Spectrum does not charge for rental equipment that I'm not using (I have my own modem, router, firewall and access points), Frontier does. 
BUT, Spectrum will not allow us to have an internet speed above 50/10 unless we also bundle it with cable and phone. So that ends up being about $125/mo with 100/10, analog phone, and the base cable package. 

\  / 

Frontier however, offers 200/200 for $60/mo by itself. Sure the rental fee is $10/mo on top of that, but that is still a MUCH better deal in my eyes then Spectrum's offer. Even adding a home phone line is only another extra $10/mo, and adding cable is $45/mo, but in total, that's still the same cost as spectrum's much slower service. Plus I never actually use cable or the home phone, so Frontier is a much more enticing offer to me.

 

Also, his argument that Verizon "forced" Frontier on him is bit ridiculous. the US Gov't forced Verizon to sell a segment of their market in fear that Verizon would become a monopoly. So they sold the California market to Frontier and handed over all of the equipment, trucks, staff, and customers with it.

 

EDIT: I also forgot to mention, Frontier is completely transparent with the fees as well. If this customer actually asked about the rental fee, they would have told him it is not removable. I called about 1.5-2 months ago and asked, and they confirmed this for me. 

Thank you very much for the context, I believe it's always important to keep that in mind. I only know what I've experienced and with your points this all doesn't seem so bad and it IS very situational. I do have concerns that the context in one area will be different than another because you can't shop across state lines or nationwide, and so people will accept and compare the options they have locally. Say $1 bottle of water is acceptable in one area and $5 is acceptable in another. Companies will compete with whoever is in a state/region's market and are free to have different pricing/fee schemes between the different regions. So while these things are situational, other companies are going to emulate profitable practices by other companies as long as there is either no competition or regulation from governmental authorities.

[Doobeedoo]

This doesn't surprise me. I've had a talk with one of my local ISPs personnel once and got similar response. 

I was thinking of maybe getting a good new router since one from my ISP is utter trash and is hot like a frying pan. But not sure how worth it it would be since I don't use WiFi but only few PCs wired. Having good overview and control over network usage and such would be great. Like I've seen with Killer network and without something like Glasswire though. 

[BrinkGG]

1 minute ago, LazyAK47 said:

Thank you very much for the context, I believe it's always important to keep that in mind. I only know what I've experienced and with your points this all doesn't seem so bad and it IS very situational. I do have concerns that the context in one area will be different than another because you can't shop across state lines or nationwide, and so people will accept and compare the options they have locally. Say $1 bottle of water is acceptable in one area and $5 is acceptable in another. Companies will compete with whoever is in a state/region's market and are free to have different pricing/fee schemes between the different regions. So while these things are situational, other companies are going to emulate profitable practices by other companies as long as there is either no competition or regulation from governmental authorities.

Oh for sure. The market of competition is why those prices are the way I listed them. If you do the math, Spectrum and Frontier are the same price with the same services, even though Spectrum is slower. I'm just giving an example of how this article doesn't tell the whole story.  

[LazyAK47]

6 minutes ago, Doobeedoo said:

This doesn't surprise me. I've had a talk with one of my local ISPs personnel once and got similar response. 

I was thinking of maybe getting a good new router since one from my ISP is utter trash and is hot like a frying pan. But not sure how worth it it would be since I don't use WiFi but only few PCs wired. Having good overview and control over network usage and such would be great. Like I've seen with Killer network and without something like Glasswire though. 

Exactly, I think ISPs are focused on expanding and improving their own infrastructure rather than end user equipment. And since they rent out bandwidth to other companies such as Boost Mobile or Straight Talk, equipment fees are an additional revenue source that won't necessarily cause a lot of backlash...yet

[AlexOak]

Frontier is a bad company... They have too much debt and are in the middle of going bankrupt.  They also sold their operations in four states just to make ends meet. 

https://finance.yahoo.com/news/frontier-communications-sell-operations-four-130701623.html

 

Them fees they also give are really highway robbery too... 

 

[justpoet]

Meanwhile, as stupid ISPs nickle and dime people in unethical ways, I'm on a gig fibre connection for 50 a month in one of the small rural towns in New England.  If I took their rental equipment, it'd be another $5 a month, but I don't have to (and don't).

 

Compared to Comcast before we moved, we got 10 meg service for 60 a month.  They were in the process of trying to support 30 meg service there for more money.  Cable companies are just scared and are trying to make their money back in ISP charges that they're no longer getting from tv as more and more people turn to direct streaming services.

[yolosnail]

Hold on. You guys have to rent your router as well as pay extortionate rates for internet?

I just get a free router, and if anything happens they just send another one out and ask me to recycle the faulty one. 

Since the WiFi part is normally fine, I just keep them and add them as APs around the house.

And I want to use my own, they just ask me to keep theirs handy so it there's a fault with the line I can plug it in to diagnose the connection

[AlexOak]

10 minutes ago, yolosnail said:

Hold on. You guys have to rent your router as well as pay extortionate rates for internet?

I just get a free router, and if anything happens they just send another one out and ask me to recycle the faulty one. 

Since the WiFi part is normally fine, I just keep them and add them as APs around the house.

And I want to use my own, they just ask me to keep theirs handy so it there's a fault with the line I can plug it in to diagnose the connection

It depends on who you have as an ISP. 

 

Spectrum, att(fiber), toast.net/(Att&t reseller), starry, etc give you a free router which is included at no cost. I would include sonic but they charge you $10 but you get so many perks with them for 50 (Service is 40 +10 modem fee)

[suicidalfranco]

R O F L

*Insert team4stars' vegeta maniacle laughter here*

 

[CarlBar]

*Surprised Pikachu Face*

 

And unlike most i'm not being ironic there. Here in the Uk every router i've ever had supplied by the ISP has been paid for one time up front and i own it from then on. The idea of renting my router period is a bit weird.

[melete]

There's only one real option for ISP in my area, and it's one of the big national ones everyone hates. ISPs in the USA are a bad time. I pay a fee for a modem as part of my bill, but I've also never tried using my own modem instead so I'm not sure what their policy would be.

[Curious Pineapple]

7 hours ago, yolosnail said:

Hold on. You guys have to rent your router as well as pay extortionate rates for internet?

I just get a free router, and if anything happens they just send another one out and ask me to recycle the faulty one. 

Since the WiFi part is normally fine, I just keep them and add them as APs around the house.

And I want to use my own, they just ask me to keep theirs handy so it there's a fault with the line I can plug it in to diagnose the connection

It's great isn't it. We get pretty cheap deals compared to *some* places and they throw hardware in with it. Not to mention the choice we have on who provides the service and over what medium.

 

I've got more routers and fibre modems than I have uses for.

[circeseye]

i have charter in california, 68 mo for 200/10 free modem and free router (not a crappy all in one). oh and cheaper and never any throttling (comcast AND att) in same area plus they charge rental fees

[Donut417]

Not a surprise from a company that took territory Verizon no longer wanted because it was a money pit. They have to figure out some way to pay down the debt or else be put in to chapter 11. 

[positivePXL]

I have the privilege of actually working for an ISP so I believe that I can a very unique invite into the going's-on of this. My conclusion in short: Frontier is lying to you. Wow, no surprise there and definitely not unique among this thread, but I am right about this being BS for more reasons. If you have questions about the process and the justification for prices and charges like these, please feel free to reply so I can confer my knowledge. I just don't feel like vomiting everything into a single post. 

[descendency]

While it might not be a big deal, it feels scummy to have a fee for something that isn't optional. If it's necessary for you to do business, then just raise monthly rates by an equal amount.

 

There are so many dirty 'hidden' fees that I wish consumer protection laws would nuke off the face of the Earth... Another completely unrelated example is renting a moving van. "$20 per day" but then forget to add the ~$70 in fees that you have to pay. It should just be illegal to advertise a price that literally no one will ever pay (before taxes). 

[alex75871]

In New Zealand we can get gigabit fiber for as low as $90 NZD (~$60 USD) and no charge for using your own router.

[kirashi]

14 hours ago, LazyAK47 said:

Will fees like this become the new normal?

In Canada, most likely not, since.... (read on)

13 hours ago, yolosnail said:

Hold on. You guys have to rent your router as well as pay extortionate rates for internet?

I just get a free router, and if anything happens they just send another one out and ask me to recycle the faulty one. 

Since the WiFi part is normally fine, I just keep them and add them as APs around the house.

And I want to use my own, they just ask me to keep theirs handy so it there's a fault with the line I can plug it in to diagnose the connection

6 hours ago, CarlBar said:

And unlike most i'm not being ironic there. Here in the Uk every router i've ever had supplied by the ISP has been paid for one time up front and i own it from then on. The idea of renting my router period is a bit weird.

... same thing in Canada, at least on the west coast. In fact, most of the major ISPs in Canada don't even allow you to supply your own modem, probably to prevent people from calling in because they can't figure out how to configure it, or because they bought a crappy one but blame their ISP for poor speeds. Here, many ISPs won't even sell you one of their modems, instead providing it as a free rental for the term of your internet plan.

 

55 minutes ago, positivePXL said:

I have the privilege of actually working for an ISP so I believe that I can a very unique invite into the going's-on of this. My conclusion in short: Frontier is lying to you. Wow, no surprise there and definitely not unique among this thread, but I am right about this being BS for more reasons. If you have questions about the process and the justification for prices and charges like these, please feel free to reply so I can confer my knowledge. I just don't feel like vomiting everything into a single post. 

Without outing myself, I can 110% confirm your conclusion.

 

While ISPs still have to pay something to manufacturers for their hardware, they can get bulk pricing discounts as high as 50% or more. This allows them to acquire a ~$250 CAD retail TG3482 whole home gateway from ARRIS for as little as ~$105 CAD capable of handling internet, phone, and IPTV services over an HFC network without bottlenecks, even during peak times. (Assuming their network has been upgraded accordingly to meet the needs of the number of customers in a neighborhood.)

 

On top of that, the supply chain industry has to plan for a certain number of failed units, which is something an ISP can measure & report back to the manufacturer or supplier with pretty darn accurate data. The manufacturer can then use this data to improve their product (which keeps ISPs and other buyers returning to purchase more units) as well as take out insurance policies on failed units. (Warranties are simply reverse-gambling contracts setup with an insurance agency, like any other form of "guarantee.")

 

This only accounts for hardware, and doesn't reflect the $10-15 cost incurred for every call or chat into the support department made by a customer, but still, it exemplifies that a modem is only a drop in the bucket when it comes to monthly operating costs. To be clear, I don't agree with being charged a rental fee for something you're not renting - it'd be like getting charged for all the ingredients to make a pizza by a pizza supply store, even though you didn't order flour because you prefer to use your own. But it's probably going to take a regulatory body to fix this, so ... I really don't know what to say other than glad I'm not in the USA.

[williamcll]

If you are paying anything above 70USD$ for gigabit internet then your ISP has issues. 

[GOTSpectrum]

On 7/3/2019 at 11:16 PM, CarlBar said:

*Surprised Pikachu Face*

 

And unlike most i'm not being ironic there. Here in the Uk every router i've ever had supplied by the ISP has been paid for one time up front and i own it from then on. The idea of renting my router period is a bit weird.

You rent equipment from Virgin media, most of the others here you own your equipment.

[Trik'Stari]

Quote

Our Frontier Residential Gateway (router) is Frontier equipment provided with every service order and specifically designed to work with our service. Our advertising and our residential Internet terms and conditions make clear that our service includes equipment charges, such as the router charge, and neither our advertisements nor our terms and conditions provide any exceptions. A customer may choose to use their own router, but if the customer does, our router charge continues to apply. Also, we cannot support or repair the non-Frontier equipment.

And yet they're claiming they need the fee to support these people?

 

Seems like a lawsuit waiting to happen.

[CarlBar]

6 hours ago, Ben Quigley said:

You rent equipment from Virgin media, most of the others here you own your equipment.

 

As a virgin media customer i paid an upfront fee, (partially waived as i was on contract), for the router. Given i'm a fibre customer i don't have any choice about using their's AFAIK. but that's ok as they also offer way better speeds than i can get from anyone else, (1.5 meg if i'm lucky from anyone else).

[Syntaxvgm]

Yep. I have them. Started this a few months ago. Fucking infuriated me. I have to pay to rent a ROUTER (not a modem!). The have an outdoor modem that brings it into the house as ethernet. They started forcing a rental fee, and just...added it on. Now keep in mind they are not like comcast who just raises you bill and adds fees for no reason, so it really surprised me. 

 

Basically the reason I keep them is they dont have a bandwidth cap that I Have to pay 30 extra to remove, and their speed are actually symmetric.