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Do you ever wonder why your internet service is becoming expensive to afford? Particularly when the cost of data transmission globally is dropping. Internet, in today’s time, is no longer a luxury. It’s a necessity. The world thrives and survives on connectivity and without a good internet connection, there’s no room for growth. So if you’re shopping around for the right internet plan, having an idea of what to expect is important. Luckily, we’re here to help you with that!

If you’re looking for answers to questions like ‘am I overpaying for my internet service? What should my monthly internet bill look like? What added expenses do I have to pay for? How to cut down on internet costs?’ and much more, then you’ve come to the right place.

What Factors Affect My Monthly Internet Bill?

When you look at your monthly internet bill, you might get shocked at the charges highlighted on it. A lot of people are stuck in a loop, spending on a service that barely delivers a fast and stable connection. For this reason, you must know and understand where exactly your money is going and what those unusual numbers on your bill mean.

Type of Internet Service

The type of internet service you’re using has a direct impact on your monthly internet bill. The 4 common types of internet services are DSL, Satellite, Fiber, and Cable. Most internet service providers facilitate their subscribers by offering multiple internet services in several tiers. The availability, speed, cost, installation, and consistency factor into the performance of the service.

DSL internet connection relies on telephone lines to transfer digital data. The service is widely available in the United States and because it uses existing telephone lines, the speed is consistent and the cost is cheaper compared to other types of internet services.

Cable internet uses coaxial cables to deliver digital data to your devices. The cable extends from your modem to your ISP. It’s a lot faster than DSL and widely available, making it a top choice amongst internet users. Unlike fiber internet, cable internet is super easy to install as well. 

Fiber internet uses glass fiber to transfer digital data in the form of light signals. It’s the fastest internet service out there, offering more speed than cable or DSL networks. But due to its limited availability, only a few internet service providers can offer the service; AT&T, Mediacom, Cox, Century Link, Frontier – to name a few.

Satellite internet is delivered via satellite signals transmitted through geostationary satellites circling the earth’s surface. Because the satellite is way above the surface of the earth, it naturally covers a lot of areas promising stable connectivity and high availability.

The type of internet connection you sign up for determines the overall cost of your monthly internet.

Speed Delivery

The type of plan you are subscribed to has a direct effect on your monthly internet bill, mostly because of the speed it delivers. The faster the speed, the higher the cost. So in the end, it all comes down to one question: How much speed do you actually need?

You can further break this question down by figuring out the number of devices needing an internet connection at the same time and the kind of online activities being performed on those devices. Your internet connection will most probably be shared with more than one device which will require more speed. And to add to that, each device will consume different speeds depending on the activity being performed online. So factors like your internet plan subscription and internet activities significantly impact your monthly internet bill.

For instance, streaming your favorite Netflix show will require more speed than checking your social media does. Or when 4 people are streaming in HD, the speed required to deliver the same quality experience to each one of them will be more as well. Moreover, for light browsing and basic online activities, the basic internet speed should be at least 25 Mbps. For a smoother experience, you can subscribe to a faster internet package.

You will find many internet service providers offering packages with speeds up to 1000 Mbps. However, those have limited availability and you don’t need that much speed anyway. You need a minimum download speed of 10 Mbps to download files, 25 Mbps to stream in Ultra 4K HD, 1.5 Mbps for personal video calls in HD, and up to 4 Mbps for online gaming. Any internet package you’re planning to subscribe to should be able to fulfill your basic internet needs seamlessly.

Setup and Installation

A huge concern for many internet users is the cost of installation and equipment in service areas. Depending on the type of internet service and plan you’re using, the upfront cost of installation and setup may vary. For instance DSL internet due to its high availability and easy installation, is popular as a cheap internet option compared to fiber internet where the cost of installing optic cables is at an all-time high.

The installation and equipment charges also depend on the internet plan you’ve subscribed to. For example, paying $40 a month for 60 Mbps compared to a 70 Mbps plan for $55 a month may sound like you’re saving a few bucks by sacrificing on speed but what if the $40 plan comes with a $50 installation fee and the other plan comes with free installation? Are you still saving up by choosing the cheaper plan?

Installation and equipment fees are subjective so depending on how much you’re willing to spare in that area, you can subscribe to an internet plan accordingly. Hidden costs such as installation costs, equipment rental charges, data overage fees, and more factor into your bill sneakily, making you overpay for a service. This is where a lot of research is needed on your part before signing up with any internet service provider.

Data Caps

Many people don’t understand how a data cap works. Most ISP’s offer internet plans with limited data and unlimited data. Once you exceed the limit of the data used, your ISP can charge you overage fees, slow down the internet speed or even remove your subscription. You must be notified of the data limit when you’re about to exceed it. Moreover, always keep an eye on plans with high data caps if you’re trying to avoid paying overage fees.

Low Competition

Being a prominent factor in this situation, lack of competition plays a major role in your monthly internet bill. Internet service providers are using basic principles of economics to drive internet prices in today’s time. The increase in demand for internet services is pushing internet service providers to increase internet prices as well. Therefore, when you’re looking for reliable service and high internet speed, with limited options in your area, it’s important to shop with an open mind.

Most internet packages you find will be expensive due to lack of competition and high demand. Now, low competition can be due to several reasons. The most common reason is the hold of strong ISPs in the market. Challenging the powerhouses in the market is a tough challenge for newbies and recovering their initial investment is even harder if they fail in the initial stages.

What Fees Should I Look Out For?

When shopping around for internet plans, you should always keep in mind that the price promised isn’t always the final price. There might be hidden charges slipped in the fine print of your chosen plan. Apart from installation fees, look out for additional charges that may include:

Equipment Fees

As soon as you sign up for a plan, you will be requested to rent out the modem or router provided by the ISP. You will be charged for the rental every month. Most of the time, internet service providers loop the equipment fees with the installation fees, making it harder to find it in the fine print. One way to avoid equipment fees is by buying your own equipment.

Activation Fees

To start your service with your local ISP, you must pay a small fee. It’s usually included in the installation fee and is not that expensive.

Early Termination Fees

When you sign up with any ISP, consider the term of agreement before finalizing. Signing a contract means committing to a specific period of time, and breaking the contract can land you in a tight spot. You will have to pay a hefty fee if not pay for the rest of the term. To avoid the early termination fees, research on providers and plans that offer contract-free services.

Overage Fees

Some plans come with a data limit and allow only a specific amount of data to be consumed by the user. Once the limit is crossed, a fee is charged. The overage fees depend on the number of people on the plan and using the internet. The longer you go using data beyond the limit, the more the overage fees are charged.

What Should My Internet Plan Look Like?

When you’re looking for the right internet plan, you must consider your internet needs and the number of devices that will be using the internet. How much your Wi-Fi costs is a direct reflection of how much internet you use. The larger the bandwidth required for your internet activities, the greater the speed needed is. You must categorize the activities that you will perform using the internet to have a clear idea of what your plan should offer.

  • Internet gaming
  • HD streaming
  • Web browsing
  • Streaming Music

Cable internet is popular for delivering the promised speed. It can easily offer up to 100 Mbps of download speed making online gaming and HD streaming as smooth as possible. Cable internet plans can range from $20 to $50. AT&T, Mediacom, Cox, and Xfinity are some popular cable internet providers delivering up to 100 Mbps of speed under $50.

DSL internet is a cheaper option amongst all, but because of its dependency on existing telephone lines, the speed and quality of the service may not be that great. DSL internet plans by top providers like AT&T, Century Link, Frontier, and Windstream are capable of delivering up to 230 Mbps of speed under $50.

Fiber optic internet is the fastest internet connection out there. It offers up to 1 Gbps of incredible download speed and up to 880 Mbps of upload speed. AT&T, Spectrum, and CenturyLink are popular fiber internet providers offering incredibly fast internet for under $50.

How To Reduce Monthly Internet Costs?

If you want to lower your monthly internet bill, practice these tricks religiously to notice a huge difference.

Consider Internet Bundles

Many subscribers bundle their internet plans with other services like phones or TV to make the most out of their monthly subscription. Not only do they save up, but they also enjoy multiple services under one roof. Moreover, some bundled plans come with a ‘no equipment and installation fees’ policy.

Choose a Cheaper Plan

Saving up also means sacrificing for the better. By choosing a plan with lower internet speeds, you’re doing yourself a huge favor and reducing your internet bill cost. The savings eventually add up and do you better.

Ask Your Internet Service Provider

Contact your internet provider and ask for customized prices or plans. While most of them may not be able to customize a plan for you, they can instead offer you tips on how to save money on the plan you’re on.

The cost of internet per month can go up to $600 depending on the type of internet connection you’re signing up for. For a plan with faster internet speeds, particularly fiber internet plans, the cost can go up to $120 a month.

The Bottom Line

The cost of your monthly internet bill depends on your location, internet needs, connection type, and the number of devices. It’s important to understand the availability of service providers in your area, and your internet usage needs to know which plan is suitable and reasonable for you. Always loop in the additional fees when comparing internet plans from different providers. We’re sure with the help of this guide, you’ll be able to find a plan that’s best for you.

Frequently Asked Questions (FAQs)

Is there an equipment fee included in the bill?

As soon as you sign up for a plan, you will be requested to rent out the modem or router provided by the ISP. You will be charged for the rental every month. Most of the time, internet service providers loop the equipment fees with the installation fees. You can avoid it by purchasing your own equipment.

How much does Cable Internet usually cost?

Cable Internet plans can range from $20 to $50. AT&T, Mediacom, Cox, and Xfinity are some popular Cable Internet providers delivering up to 100 Mbps of speed under $50.