Do I Need a Modem and Router? What's the Difference?
Confused about modems, routers, and gateways? Here's everything you need to know about internet equipment—and how to save money on rental fees.
Most people have no idea what the difference is between a modem and a router—and internet providers love it that way. They rent you a "gateway" (modem + router combo) for $10-15/month, costing you $240-360 over two years. Understanding the difference between these devices can save you hundreds of dollars and give you better WiFi performance.
What is a Modem?
A modem (modulator-demodulator) connects your home to your internet service provider (ISP). It translates the signal from your ISP—whether that's a coaxial cable (cable internet), fiber-optic cable (fiber internet), or phone line (DSL)—into a digital signal your devices can understand.
Think of the modem as the gateway between your home network and the outside internet. Without a modem, you have no internet connection at all. The modem has one job: bring internet into your home. It doesn't create WiFi, manage devices, or provide security—that's the router's job.
What is a Router?
A router takes the internet connection from your modem and distributes it to all your devices—phones, laptops, smart TVs, gaming consoles, etc. The router creates your home WiFi network and manages traffic between devices. It also provides basic security features like a firewall to protect your network from external threats.
Modern routers broadcast WiFi on two or three frequency bands (2.4 GHz and 5 GHz, or 2.4 GHz, 5 GHz, and 6 GHz for WiFi 6E). They also have Ethernet ports for wired connections, which provide faster and more stable internet than WiFi.
What is a Gateway?
A gateway is a modem and router combined into a single device. Most internet providers rent you a gateway for $10-15/month. Gateways are convenient because they're one device instead of two, but they're often lower quality than buying separate equipment.
The biggest downside of renting a gateway from your ISP is the cost. At $12/month, you'll pay $288 over two years—enough to buy a high-quality modem and router outright. Additionally, ISP-provided gateways often have weaker WiFi performance, fewer features, and limited customization options compared to consumer-grade equipment.
Do You Need Both a Modem and Router?
It depends on your internet type:
Cable Internet (Spectrum, Xfinity, Cox)
Yes, you need both. Cable internet requires a cable modem to connect to the coaxial cable from your ISP, plus a router to create WiFi. You can rent a gateway from your ISP or buy your own modem and router separately.
Fiber Internet (AT&T Fiber, Verizon Fios, Google Fiber)
No, you only need the ISP's gateway. Fiber internet requires a special fiber gateway (ONT + router combo) provided by your ISP. You cannot use your own modem with fiber—the gateway is included for free with your service.
5G Home Internet (T-Mobile, Verizon)
No, you only need the ISP's gateway. 5G home internet uses a wireless gateway that connects to cellular towers. The gateway is included for free with your service, and you cannot use your own equipment.
DSL Internet (AT&T, CenturyLink, Frontier)
Yes, you need both. DSL requires a DSL modem to connect to phone lines, plus a router for WiFi. Most DSL providers rent you a gateway, but you can buy your own DSL modem and router.
Should You Rent or Buy Your Equipment?
If you have cable or DSL internet, buying your own modem and router saves money in the long run. Here's the math:
Renting from ISP:
$12/month × 24 months = $288
Buying your own:
$80 modem + $100 router = $180 one-time cost
Savings: $108 over 2 years
Additionally, owning your equipment gives you better WiFi performance, more customization options, and the ability to upgrade whenever you want. ISP-provided gateways are often outdated and lack features like mesh networking, advanced parental controls, or guest networks.
What Equipment Should You Buy?
If you decide to buy your own equipment, here's what to look for:
Cable Modem: $60-100
Look for DOCSIS 3.1 support (required for speeds above 300 Mbps). Check your ISP's approved modem list before buying. Popular models: Motorola MB8600, Arris SURFboard SB8200, Netgear CM1000.
WiFi Router: $80-200
Look for WiFi 6 (802.11ax) support for future-proofing. Choose a router rated for your home size (1,500-3,000 sq ft). Popular models: TP-Link Archer AX55, ASUS RT-AX86U, Netgear Nighthawk AX6000.
Mesh WiFi System: $200-400
For large homes (3,000+ sq ft) or homes with WiFi dead zones, mesh systems provide better coverage than a single router. Popular models: Google Nest WiFi Pro, Eero Pro 6E, TP-Link Deco X90.
The Bottom Line
For cable and DSL internet, buying your own modem and router saves money and gives you better performance. For fiber and 5G home internet, use the ISP-provided gateway—it's included for free and required for the service to work. If you're currently renting equipment from your cable provider, buying your own equipment pays for itself in 12-18 months.