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Modem vs. Router: Learn the Differences (and Maybe Save Some Money)

If you‘re considering getting internet for the first time or want to upgrade your current setup, you‘re probably wondering – what‘s the difference between a modem and a router? Most people don’t understand what these essential devices do, which is understandable. After all, your internet service provider (ISP) handles installing and configuring them, so you don‘t have to get your hands dirty.

But while convenient, this lack of knowledge benefits your ISP more than you. That‘s because they want to rent you their equipment indefinitely, which is likely if you don‘t grasp how modems and routers work.

You see, understanding these devices allows you to customize your home network, troubleshoot connection issues, and possibly save hundreds of dollars.

In this comprehensive guide, we‘ll break down everything you need to know about modems and routers. You‘ll learn:

  • Exactly what modems and routers do
  • How to choose the right models for your needs
  • If you should rent or buy your own equipment
  • How to set up your network securely
  • Tips for troubleshooting problems
  • And much more

By the end, you‘ll have the knowledge to build a fast, reliable home network that keeps your data safe.

Let‘s start with the basics – what is a modem?

What Exactly is a Modem?

A modem is the device that brings an internet connection into your home. It communicates with your ISP to receive a signal through a physical cable like coaxial, DSL phone line, or fiber optic. The modem then converts that signal into a digital format that can be transmitted to other devices.

You can think of a modem like a translator – it takes the foreign language of your ISP‘s cables and turns it into the digital language your computers and devices understand.

Modems are relatively basic devices in terms of features. They allow you to connect a handful of devices directly using Ethernet cables. But modems do not provide Wi-Fi access or advanced networking capabilities – that‘s the router‘s job.

Physically, a modem is a small plastic box that connects to your ISP‘s cables on one end. On the other end are ports to plug in devices via Ethernet. It also needs to be powered by an electrical outlet.

Now let‘s go over the key facts about modems:

Types of Modems

There are three main types of modems based on the connection provided by your ISP:

  • Cable modems for coaxial cable internet like Xfinity and Spectrum. They offer faster speeds, normally up to 400 Mbps for downloads.

  • DSL modems for telephone line internet like AT&T. Speeds max out around 100 Mbps down.

  • Fiber optic modems for fiber internet like Verizon Fios. Blazing fast with speeds up to 1 Gbps down.

Modem-ISP Compatibility

It‘s crucial to match the type of modem you have with the service your ISP provides. For example, a cable modem won‘t work with DSL internet. You also need to ensure any modem model you buy is approved by your ISP.

Modem Speeds

Modems are rated by the maximum download and upload speeds they support, like 600/20 Mbps. Make sure to get a modem that meets or exceeds the speeds of your ISP plan. A slower modem will bottleneck performance.

According to 2021 FCC data, the average internet speed in the US is 183 Mbps down and 35 Mbps up. So a modem rated for 300/50 Mbps would suit most needs. But get a faster model if you want to future-proof for speed upgrades.

Modem Connections

Modems have a coaxial cable port to connect to your incoming ISP line. They also have multiple Ethernet ports to plug in devices directly, normally 4-16 ports. No Wi-Fi is provided, only wired connections.

Alright, now you know the modem brings the internet to your home‘s front door. Next we‘ll look at what a router does to let devices inside access the internet.

What Does a Router Do?

If the modem is the front door, the router is the butler of your home network – it directs data across all your devices intelligently.

The router connects to your modem, then broadcasts Wi-Fi signals throughout your home so devices can get online. It also handles advanced networking duties like traffic management, security, content filtering, and more.

Let‘s dig into the key facts about routers:

Wireless & Wired Connections

The router connects to your modem via Ethernet cable. It then converts the signal to wireless access via Wi-Fi. The router‘s dual-band Wi-Fi provides strong coverage for today‘s many wireless devices.

Routers also have multiple Ethernet ports to connect wired devices like desktop PCs, smart TVs, and game consoles. Plus they have a WAN port to link with the modem.

Network Traffic Management

With many devices accessing the internet simultaneously, routers use technology like Quality of Service (QoS) to smartly distribute bandwidth. This prevents lag when gaming or streaming movies.

Network Security

Routers provide a firewall to block malicious traffic and threats. They also allow encryption through VPNs and Wi-Fi protocols like WPA3 to protect your data.

Content Filtering

Parental controls let you limit access to inappropriate content and set internet usage time limits. Helpful for managing kids‘ access.


Routers offer extensive settings and options through their management interface. Tweak Wi-Fi channels, passwords, ports, IP addresses, and much more.

Now let‘s look at factors to consider when choosing a router.

Wi-Fi Standards – Get a router using the latest Wi-Fi 6 standard for optimal speed and capacity. Or at least Wi-Fi 5. Both outperform older Wi-Fi 4 routers.

Bands – Dual or even tri-band routers allow for less congestion and better coverage across your home. More bandwidth keeps all devices running smoothly.

Speed – Match your router‘s maximum speeds with your ISP plan‘s speeds to prevent slowdowns. Aim for AC1200 to AC4000 speeds for robust performance.

Ports – Have enough Ethernet ports for wired devices, normally 4-8. Plus WAN port for modem and USB port for sharing storage.

Size – More square footage and thick walls require a stronger router signal. Extended range or mesh routers can help here.

Features – Consider useful features like QoS, VPN support, guest networks, and robust parental controls.

Wi-Fi Mesh – For large or multi-story homes, Wi-Fi mesh kits like eero and Orbi provide full home coverage without dead zones.

Now that you know routers deliver Wi-Fi throughout your home, let‘s look at whether to rent or buy your equipment.

Should You Rent or Buy Your Modem and Router?

When signing up for home internet service, ISPs will "conveniently" rent you a modem and router for monthly fees around $10-$15 each. But is renting actually more affordable in the long run?

The main benefits of renting your equipment from your ISP are:

  • Convenience – They handle delivery, setup, and support if issues arise. No effort on your end.

  • Updates – Your ISP will upgrade or replace rental devices for free as technology improves.

  • Familiarity – Using your ISP‘s equipment means it‘s guaranteed to work with their service.

However, there are also some clear downsides to renting:

  • Cost – Rental fees typically add up to $240-$360 per year. Just a few years equals the cost to own equipment.

  • Lack of Control – Can‘t customize settings beyond basics or use advanced third-party features. Stuck with ISP defaults.

  • No Ownership – Keep paying endless rental fees with nothing to show for it in the end.

Buying your own modem and router upfront provides these notable benefits:

  • Long-term savings – Eliminate expensive monthly rental fees. Break even within 1-2 years.

  • Customization – Tinker with settings, use third-party firmware like DD-WRT, install VPNs, and more.

  • Ownership – Your hardware to keep and use across ISPs. Can sell it and upgrade when you want.

The downsides of buying equipment include:

  • Upfront cost – Could spend $300+ when getting both modem and router depending on models.

  • Setup – Must install hardware yourself and tweak settings for your network needs.

  • Troubleshooting – Your ISP likely won‘t support user-owned devices if issues arise.

Ultimately there are good reasons for renting or buying. Consider your tech comfort level, need for customization, and budget.

But with ISP rental fees so costly over time, buying makes sense if you know what models work for your internet service. Let‘s go over how to choose the right hardware.

How to Choose the Right Modem and Router

Picking compatible equipment that won‘t bottleneck your internet speeds takes research. But follow these steps when buying a modem and router:

1. Confirm your ISP service details – Know your internet plan speeds and whether you have cable, DSL, or fiber.

2. Check your ISP‘s approved modems list – Most ISPs maintain a list of tested, compatible modems. Pick one that meets your speed needs. Popular modem brands include Motorola, NETGEAR, and TP-Link.

3. Select a high-speed router – Match your router specs to your internet speeds – AC1900 for 200 Mbps plans, AC3000 for 500 Mbps, etc. Leading brands are NETGEAR, Linksys, and ASUS.

4. Consider a modem/router combo – All-in-one devices like the Motorola MG7700 combine the modem and router to save money upfront.

5. Buy from a retailer with a good return policy – Test that your modem and router work properly after setup. Return them if you have any issues.

Buying your own equipment takes more legwork but saves substantially long-term by avoiding rental fees. Just ensure your hardware is compatible with your ISP during research.

Next let‘s go over how to set up your network securely once you have your modem and router.

How to Setup Your Home Network Securely

Setting up your home network correctly means more than just plugging things in. A few security best practices will keep your data safe. Here are key steps:

Use Strong Passwords

When setting the passwords for your modem, router, and Wi-Fi network, make sure they are long and complex. Use a phrase or series of random words that can‘t be easily guessed.

Update Firmware

Check for and install the latest firmware updates for your modem and router. These contain vital security patches that close vulnerabilities.

Enable Your Router‘s Firewall

Make sure the network firewall is on to filter out malicious traffic. Also turn off remote admin if you won‘t access your router outside your home network.

Change Default Credentials

Routers come with default admin usernames and passwords. Be sure to change these so hackers can‘t easily access your network settings.

Use WPA3 Encryption

When setting up your wireless network, use the latest WPA3 protocol to encrypt traffic between devices and the router. Avoid weaker WEP or WPA.

Hide Your SSID

By disabling broadcast of your network name (SSID), you prevent outsiders from seeing your Wi-Fi details when scanning nearby networks.

Use a Guest Network

Set up a separate guest Wi-Fi network with its own password for visitors. Keep your main network private.

Enable VPN

For enhanced online privacy, install virtual private network (VPN) software on devices. VPNs like ExpressVPN and NordVPN encrypt traffic.

Following these tips ensures your network data stays secure from prying eyes. Now let‘s go over some troubleshooting basics.

Troubleshooting Your Internet Connection

Dealing with a slow or flaky internet connection can be frustrating. Rebooting everything usually fixes temporary glitches. But for persistent problems, apply some general network troubleshooting techniques:

  • Check modem lights – Refer to modem manual to confirm lights indicate proper startup and connection.

  • Inspect cables – Replace any damaged Ethernet cables between modem, router, and devices. Ensure cables are tightly plugged in.

  • Try wired over Wi-Fi – Connect your computer directly to your modem via Ethernet. If speed improves, issue may be with your router or wireless signal.

  • Change Wi-Fi channel – Download a Wi-Fi analyzer app for your smartphone to detect congestion on your network channel. Try changing router channel if needed.

  • Check speed directly at modem – To verify your ISP is delivering promised speeds to modem, connect computer directly to modem and perform a speed test.

  • Reset devices – Restarting your modem and router can clear up temporary glitches. For routers, reset to factory default settings if issues persist.

  • Contact ISP – If you still have problems after trying above steps, contact your ISP support. They can check signals levels and confirm if speeds are reaching your modem properly.

While ISPs should assist with service issues, they likely won‘t provide support for your owned equipment. Having basic troubleshooting knowledge prevents having to replace hardware unnecessarily.

Additional Modem and Router Questions Answered

We‘ve covered a lot of ground explaining the crucial differences between a modem and router. Let‘s wrap up by answering some other commonly asked questions:

What is a modem/router combo unit?

These are 2-in-1 devices that combine a modem, router, switch, and Wi-Fi access point into one hardware unit. Modem/router combos like the Motorola MG7700 provide convenience and cost savings upfront. But combos tend to lack the robust 3rd party firmware support that stand-alone routers have.

What is mesh Wi-Fi?

Mesh systems like eero and NETGEAR Orbi have multiple access points that blanket your home with a strong, unified Wi-Fi signal. No more dead zones! The mesh satellite units sync with the main router unit to provide seamless coverage. Mesh Wi-Fi is essential for larger homes and removing coverage gaps.

How can I monitor my home network?

Routers often have apps like NETGEAR‘s Nighthawk App that let you view connected devices, run speed tests, disable unwanted devices, and more. Some routers even have network storage and virtual assistant capabilities. Monitoring your network helps optimize performance and security.

Should I get extended warranty on equipment?

Modems and routers normally have at least a 1 year manufacturer warranty. Purchasing an extended warranty through your retailer provides assurance that faulty hardware will be repaired or replaced 2-3 years down the road. Just read the fine print on exactly what damage is covered by any extended warranty.

When should I upgrade my router?

While routers can function reliably for 5 years or more, upgrading every 3-4 years keeps your Wi-Fi performance and security features current. Consider a new router if your internet speeds have increased significantly or you need to connect many more devices simultaneously. Newer standards like Wi-Fi 6 assure the best speeds.

Key Takeaways on Modems and Routers

That wraps up our complete look at modems and routers – the essential networking equipment powering your internet.

Here are the key highlights:

  • Modems connect to ISP cables to bring the internet to your home while routers broadcast Wi-Fi for device access.

  • Match your modem and router specs to your internet speeds to prevent bottlenecks.

  • While renting through your ISP is simpler, buying your own hardware saves substantially long term.

  • Set up your network properly using security best practices to keep your data safe.

  • Learn basic troubleshooting to resolve common internet connectivity problems.

We hope this guide has helped you understand the crucial differences between modems and routers. Applying this knowledge will allow you to build the ideal home network that keeps all your devices running smoothly.


Streamr Go

StreamrGo is always about privacy, specifically protecting your privacy online by increasing security and better standard privacy practices.