No 12-month minimum sounds safer. Here's what it costs.

What a term actually buys you

When a carrier quotes 12, 24 and 36 months, the monthly price usually drops as the term gets longer. That isn't a trick. Installing a circuit costs the carrier money up front, and sometimes it has to build fiber into your building. A longer term gives it more months to earn that back, so it can charge less each month or waive the install charge.

Month-to-month service flips that. You keep the right to leave, and you usually pay for it with a higher monthly rate, an install charge, or both. For a simple broadband line the gap may be small. For dedicated fiber that needs construction, many carriers won't offer month-to-month at all.

So the honest answer to "is a term contract bad?" is: it depends what you get for it. Put the price at each term length on one page and the decision usually makes itself.

What actually costs people money on a contract

In the bills and contracts we read, term length is rarely the problem. These clauses are:

• Auto-renewal. Many business contracts renew on their own at the end of the term, sometimes for another full term, sometimes month to month at a higher rate. Read which one yours does.
• The notice window. To stop a renewal you often have to give written notice 30 to 90 days before the end date, in the way the contract says. Miss it and you're renewed. See how to stop a telecom contract auto-renewal.
• The early termination formula. Some contracts charge the remaining months in full, some charge a share of them, some let you move or upgrade service without a penalty. Know the formula before you sign.
• Price-change clauses. A contract with no minimum term can still let the provider raise its price with notice. Ask how much notice and how often.
• Promotional rates. A low first-year price that jumps after month 12 is common. The contract should say what the rate becomes.
• Add-ons that restart the clock. Adding a line or upgrading speed can extend the term on the whole account. Ask before you add anything.

One more thing worth separating: payment terms aren't contract terms. "Net 30" tells you when an invoice is due. It tells you nothing about how long you're committed or what happens to your price next year.

Ask these before you sign any term

1. What is the monthly price at month-to-month, 12, 24 and 36 months for the same service?
2. Is there an install or construction charge, and does a longer term waive it?
3. What happens at the end of the term: renewal length, new rate, and how notice must be given?
4. What is the early termination formula, and can we move the service to a new address or upgrade it without one?
5. Can the price change during the term? With how much notice?
6. Does adding a line or service extend the term on the rest of the account?

The same questions apply to a managed IT or phone platform agreement. A provider-side agreement and the carrier contracts under it can have different end dates, so line them up.

How we handle terms

We put the price at each term length side by side for every carrier that serves your address, and we tell you when month-to-month is worth the extra. The contract is in your company's name and the term is your choice. We put each end date and notice window on our calendar so a renewal doesn't sneak up on you.

How we get paid: carriers pay us a monthly commission of 5% to 18% of what you spend with them. Your price is the same as going direct, and we'll tell you what any shortlisted carrier pays us before you sign. Details are on how we get paid.