What’s the Difference Between a Modem and a Router?

Many Internet service providers offer combined modem/router units, but a modem isn’t the same thing as a router. Understanding exactly what a modem is is important so you can buy your own modem and stop paying $8-$15 a month to rent one from your Internet service provider.

A router and modem are really two separate devices. If you’re purchasing your own modem, you might need to also purchase a router if you don’t already have one.

What a Router Does

Your router essentially shares your Internet connection among multiple devices. A typical router is now a wireless router, and it creates and hosts a Wi-Fi network multiple devices can connect to. It likely has multiple Ethernet ports, too, allowing you to connect multiple devices.

The router then connects to the Internet through the modem and the router itself receives a single public IP address on the Internet. Servers on the Internet communicate with your router, and the router routes that traffic to the appropriate devices on your home network.

But, with just a router, you can’t actually connect to the Internet. The router must be plugged into the Internet via an Ethernet cable. You need a modem to do so.

What a Modem Does

Your modem communicates with your Internet service provider’s network. If it’s a cable modem, it plugs into your cable provider’s infrastructure via a coaxial cable. If it’s a DSL modem, it plugs into your telephone line.

The modem communicates with your Internet service provider, and you’ll need the correct type of modem that will work with your ISP’s infrastructure.

The modem plugs into whatever type of infrastructure you have — cable, telephone, satellite, or fiber — and gives you a standard Ethernet cable output that you can plug into any router (or a single computer) and get an Internet connection.

Combined Routers and Modems

Some Internet service providers offer a modem and router in a single box. That box has the electronics and software in it to provide both functions, acting as a modem that communicates with your ISP and functioning as a router to create a home Wi-Fi network.

ISPs like offering all-in-one devices like these, but there’s no reason you have to use one in the same box.

Buy Your Own Modem

Buying your own modem is an easy way to save money on your Internet bill. Check your monthly bill and you’ll probably see an “Equipment rental” or “Modem rental” fee that’s costing you between $8 and $15 per month.

Rather than renting your modem from your Internet service provider, you can buy your own and hook it up. You can then return the original modem to your ISP and remove that fee from your monthly bill.
Of course, if you have a combined modem/router unit, you’ll also need to buy a home router. But that’s not necessarily bad news — the router your ISP offers you may not have the latest technologies like 802.11ac and 5 GHz Wi-Fi, so you may be better off buying your own router anyway.

Check to see if you’re actually renting your modem and how much you’re spending every month, and then find the best modem for your ISP. The Motorola SURFboard SB6141 is a good bet for most people at around $70. If you’re spending $10 a month on a modem rental, you’ll break even and start saving money after just seven months. That’s hundreds of dollars saved over the life of your modem.

You can use any wireless router you want, but the modem you purchase has to be approved by your Internet service provider and function with their network. In a sense, you can think of your router as a device that’s part of your home network and the modem as a device that’s part of your ISP’s network.

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