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Expensive Internet Bill? Your Contract-Free Provider's Fees May Be to Blame

3 weeks ago 9

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When's the last time you looked at how much you're paying for internet service? You may be surprised by some of the fees listed on your bill, especially if it's a new internet service provider. Charges for installation, equipment rental and even data overage charges may make your monthly internet bill higher than you expected. And locking into an internet contract can seem like you're trapped. However, not all ISPs are like that.

CNET's latest People's Picks survey dives into what our readers think about their ISP -- including price, reliability, speed and overall satisfaction. We found that all of the ISPs listed below work to mitigate the frustrations that contracts can cause. But some providers make fees trickier to navigate. 

CNET's People's Picks: Internet service providers 

Contract-free internet is flexible, but the costs can add up

All 13 People's Picks ISPs have contract-free service plans, which give you more control and flexibility with your internet service. Before signing up for month-to-month service, most providers, including SpectrumAT&T and Xfinity, require a credit check to determine whether you qualify or need to pay a deposit. And you'll likely need to pay for your first month upfront to kick-start a pay-as-you-go plan, rather than paying after the fact as you would with a contract.

Contracts have generally become a thing of the past among 5G home internet providers such as T-Mobile and Verizon. As those services have become widely available in a relatively short period of time, competitors have been forced to do away with some of their more irritating features, including contracts and data caps, according to CNET principal writer Joe Supan. 

However, month-to-month service doesn't mean it's cheaper or that there aren't other service requirements. 

If you're deciding between service plans or providers, it's best to compare prices between no-contract ISPs and those that require a contract. We recommend factoring the cost per Mbps, which is the internet speed compared to the plan price. The cost per Mbps may be higher for month-to-month service. For example, GFiber has an excellent cost per Mbps and doesn't require a contract. If you prefer the best deal over flexibility, you may opt for a contract for a lower monthly payment. Whereas you may be OK with paying more if you want the freedom to cancel whenever without termination fees. 

Contract-free ISPs aren't always the cheapest

Among the 13 People's Picks providers that scored highly, Electric Power Board, Quantum, Sonic, Ting and Ziply were the only providers that didn't receive complaints from CNET readers about price hikes and hidden fees. Readers who have Ting reported that their bill has stayed the same over the past year, and most Sonic users reported the same. Only a small percentage noted a price increase, and only because a promotional period ended. 

Hidden fees, or "junk fees," typically include charges for data cap coverages. Some ISPs are even charging subscriptions for internet service and network maintenance. And other fees also add up, such as charges for equipment rental, installation and activation. It's not uncommon to sign up for a service expecting one price, only to get a higher bill because of unexpected fees such as activation or installation.

"Activation and equipment fees are still pretty common, and I wouldn't consider them a red flag necessarily. What I would look out for is if a provider will waive the fee if you use your own equipment. You should be able to buy your own modem and router without being forced to use your ISP's," Supan said.

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You could be overlooking the broadband facts label, which lists your plan's speeds and price.Supan said broadband labels are useful for anyone shopping for internet service. "All the fees are laid out clearly, including one called 'early termination fee.' This will tell you how much you'll be on the hook for if you leave your contract before it's over," he explained.

Before signing up with a service provider, look for any charges that may not be advertised, such as data cap overage charges or credit card processing fees. It's also worth asking if any fees can be waived or if there's a discount available. For example, Xfinity charges less for self-installation compared to professional set-up. And you may be able to skip equipment rental charges by getting your own router. 

"This is one of the best ways to save money on your internet bill. You can get a quality router for $100, while most ISPs charge around $10 a month," said Supan. "In most cases, buying your own equipment will pay for itself within a year."

You may be comfortable with some fees, which is OK. But it's most important to know what you're signing up for beforehand. 

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