25 November 2012

My Experience Buying a Cable Modem with Time Warner Cable

On 15 October 2012, Time Warner Cable started charging a separate rental fee for its cable modems of $3.95 per month. Prior to that date, the cable modem fee was bundled into the cost of the service, providing a customer with little reason to purchase a modem on his or her own.
TWC's terse little message about the fee was sent on a postcard
Time Warner Cable deploys 40+ different modems, but is authorizing only 5 for my level of service. The modem that they supplied me, a Turbo customer, was the Thomson/RCA DCM425. This is a DOCSIS 2.0 unit which retails for about $50. At that purchase price, the breakeven on $3.95 per month savings in rental fees is just over 12 months -- a hell of a return (a simple IRR about 87% annually if the modem has a 4-year life -- actually better than that since the savings on the modem are doled out each month rather than at the end of each year and better still if the rental price of the equipment goes up, which would not be without precedent in the annals of the cable industry -- IRR calculations are available here).
Thomson/RCA DCM425, prefers to be horizontal
However, the least expensive modem that they will authorize for my level of serviceis a Motorola SB6141. This modem meets the DOCSIS 3.0 spec and represents the latest commercially available cable modem technology. This modem would cost about $115. That return is about 23% annually if the modem has a problem-free 4-year life.
Motorola SB6141, jauntily vertical
I also learned from TWC tech support that the "Turbo" service, while not requiring a DOCSIS 3.0 modem will actually work faster with such a modem. The DOCSIS 3.0 modem would also work with any higher speed service which is something I have considered getting. The differences between the DOCSIS specs mainly boils down to the fact that the 3.0 modem is more future-proof than the 2.0 modem.

Hmmm, what one would really want is for TWC to rent the DOCSIS 3.0 modem for $3.95. I went to their store and asked for just that. No dice. TWC's rep would only give me a new version of the same Thomson/RCA modem I had. When I got it home, it worked exactly the same way the old one did. About 16 Mbps downstream and 0.7 Mbps upstream.

I did like the idea of faster service and, 19% annually is a lot better than my portfolio typically yields.

After waiting for the early purchasers to get through the system, I found a new Motorola SB6141 from a well-regarded eBay seller which I won at auction for $97.50.

I connected it and got it authorized by TWC over the phone in about 5 minutes on a Saturday morning. I did have to wait about 40 minutes to return my old modem to TWC at their store. Going to their store at 11AM on a Saturday is not recommended.

Bottom line: My downstream speed is now about 19 Mbps (a figure I got on occasion before, but not regularly) and my upstream speed is now about 2 Mbps (a figure way better than I ever got before). If my modem lasts 4 years, it will give me a return of about 33% annually and provide performance call it safely ~10%+ better than I was getting. That's a good deal provided that the risk of failure of the modem is modest.

How did TWC do? On the downside: TWC sprung a fee on their customers on 2-weeks notice, they required the purchase of more expensive equipment than they provide themselves and made me wait 40 minutes simply to return something to them. On the plus side, the authorization couldn't have been easier. It wasn't the greatest performance by a cable operator, but it was adequate.

More resources: stories in Multichannel News and New York Times Bits Blog

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