Magpie Tech Tips

May 28, 2014

Calendar Your Internet Service Contract Expiration

When is your ISP's contract up for renewal? If you let it pass without review, you could get stuck in an auto-renewal and miss out on better rates. This Tech Tip explains how to avoid that.
This month we are giving you PlanetMagpie’s #1 Tech Tip!

When companies purchase internet service (from ISPs like AT&T, Comcast, XO, Reliance, etc.), they typically sign 1-5 year service contracts. Every internet service contract we have ever seen has an "auto-renew" clause. That means if you signed a contract for 3 years of service and you miss the renewal date, you are locked in for another 3 years with the same service, at the same price.

This should strike fear in the heart of every business owner. Look at the numbers. Say you pay $1,400 a month for 3 bonded T1s (4.5MB) and your contract has just auto-renewed. That’s $50,400 worth of internet service over the next three years on slow T1s. Now consider that fiber has been installed in your area and you could have gotten 20MB of high-speed bandwidth for $800 a month. You’ve missed an opportunity to save $21,600 on your internet service over the next three years and improve the speed of your service.

Like most technical services, the cost goes down over time and quality improves. If you let your internet contract auto-renew, you may be stuck on your bonded T1s for another three years when high-speed fiber is available in your area at a lower cost.

Missing an ISP contract renewal date is a big mistake, and it costs companies a lot of money. We have worked with many companies who have tried to escape their auto-renewed policies and they are nearly impossible to get out of.

Our Tech Tip: Find out when your ISP’s contract is coming up for renewal. Schedule a review of it at least 6 months in advance of the renewal date.

Six months gives you time to shop around for the best bandwidth and speed at the best price. Keep in mind that new internet service can take 90-120 days to install, so the process really does need to start six months out.

If you need help procuring internet service bids and negotiating this process, call PlanetMagpie. We can help you determine your bandwidth requirements so that your network needs are covered today and throughout the life of the contract. We also help with the install of new service.