If you’re like me, then you find contracts difficult to understand. They don’t use normal people words, but instead use technical and legal jargon. Combined with the ultra small font you have to wonder if they even want you to be able to understand your contract. What if you accidentally sign over your first born child?
I’m joking, but contracts are confusing, and a little scary, too. However, it’s important that you read it (and understand it) before signing your name on the dotted line. That way you ensure that you’re getting the service you’re paying for and aren’t surprised by any hidden costs or fees.
What to Understand About ISP Contracts
There are multiple points, rules or guidelines in your internet contract, but only a few that you’ll have to worry about on a day-to-day basis. I’m going to explain these points to you in more depth below.
Contract Length
Contract length refers to how long you’re obligated to use so-and-so’s internet service. Most ISP plans are for 2 years, although shorter times do exist.
What you want to look out for in your contract are the fees if you decide you need to cancel your service. Most fees are in the range of $175 to $300. What’s more is that many ISPs tack on a $5 or $10 surcharge for every month left of your service.
For example, if you had 15 months left and the fees were $175 to cancel prematurely and $5 for every month you had left, you’d end up owing $250 in fees, not including what you might owe for your last bill.
To avoid this type of issue in the future you might ask yourself if you might need to move or do anything that will force you to cancel your service. It might be best to go on a month to month plan then. Also, you’ll want to look to see what the trial period (if any) is. Many ISPs will let you cancel without consequence if you do so within a certain time frame, such as 14 or 30 days. That way if you’re unhappy or if you’ve found something better, you can make the switch without paying for it.
Data Limits
Data limits will apply to you if you are purchasing a wireless 3g internet plan. It won’t apply to hard or landline connections.
Data limits or caps is how much data you can use during your billing cycle. Every time you send a picture, play on Facebook or browse the internet, you are spending a portion of your “data allowance.”
Each ISP will handle exceeding data caps differently. Most internet service providers in the USA will charge you an overage fee. This is very expensive in comparison to what it’d cost you for a plan with an equivalent data cap to what you spent. On average you’ll spend about $10 for every GB over your cap you go.
Other ISPs will throttle your service. In other words, instead of charging you an overage fee they’ll slow your internet down significantly.
Speeds Aren’t Guaranteed
People complain about their internet speeds. Although it’s not as bad as it used to be, I’m sure there are people out there that truly do not get what they’re paying for. However, I think that the majority fall under the category of not understanding what the listed speeds truly mean.
For one thing, if you pay attention to the chart you looked at to compare internet speeds, next to the speed or below the chart it will say that you will receive “up to XX Mpbs” with XX being your speed. That doesn’t mean you’ll always have that fast of internet, but you might. It’s sneaky, but that’s the way they word it so they can hook you in with fast internet without having to be exact, or very consistent.
Note – If you do any sort of reading on internet service providers you’ll see that they’re under constant scrutiny for the speeds they say they have, and what they actually deliver. The gap between the two has been slowly closing.
Another thing — the listed speed is usually the download speed, which is what most people care about anyway. The upload speed is usually much less. In my experience it’s about 10 to 12 percent of your download speed. Many ISPs list their upload speed in addition to the download speed, so you’ll know what it is before you buy.
Promotion Terms
This is a big one. ISPs are going to hook you in with a great deal. Get the fastest internet for $10, free channels with your basic cable purchase and a free unicorn with every internet/phone/tv bundle.
Sounds great, right?
What they fail to tell you, other than in their fine print, is that these promotional deals are only good for so long. It’s usually like 6 or 12 months. Then after this promotional term is over, you’ll be charged the standard rate for your service or you’ll have the extras taken away. So slower internet, fewer channels and no more unicorn rides.
This is important to understand so that you’re not shocked 6 months down the road when you get that bill in the mail and it’s double what you’re used to paying, or when you lose the HBO or Showtime channels.
Additional Charges, Taxes, Etc May Apply
Most services of this nature will have additional charges on top of your monthly service charge. This shouldn’t come as a shock to you if you have a cell phone plan. This is usually for taxes and local/federal fees. You could also run into a convenience fee, which is a fee for paying your bill over the phone with a debit or credit card, as opposed to setting up a free auto-pay option or by paying by check.
As a general rule of thumb I figure about an extra $15 to $20 on top of my normal charge. So if your internet is $59.99 per month, I would figure on paying closer to $80 per month with all the fees tacked on.
Still Don’t Understand Your Internet Contract? Ask Questions!
If after this you still don’t understand the contract you should contact the internet service provider. They will help you to understand your contract, especially if you’re a soon-to-be new customer. They want to earn your business, so make them work for it. Both you and your ISP will be much happier long term if you know what you’re getting yourself into before you sign up for an internet service plan.