Saturday, October 10, 2009

mauling monopolies

Internet by satellite is the solution for people living in far away places.
And who are on the road.
Basically you need a satellite dish and a modem and you are on the internet through a connection with a satellite.
If you are traveling you can even have an automated system.
That a satellite disk automatically goes from the place where you happen to be automatically to the correct satellite.
In that case you need a satellite disk controller that works in collaboration with your modem.
Of course these systems come with a router so that in the area where you are you can get on line through your own WIFI.

If you live in a house and you want satellite internet with a dish and modem, you are going to spend between $ 200 and $ 300.
Including installation.
If you want the mobile system on your RV, that costs more of course as the satellite disk is very sophisticated.
But a simple system for a house, that includes a Hughes HN7000S modem, not more than $ 300.
With rebates and special offers even only $ 200. (Satellite Star Internet)

Next, you pay a monthly fee to be on internet that depends of the quantity of use.
These fees are fixed no matter what you paid for purchasing the system.

But what now when your Hughes HN7000S modem breaks down?
What happened with the internet satellite system build into the Fuso Szulc expedition vehicle?
How to replace the modem for a new one?
While you know that it has to be the same HN7000S modem: any other won't work in the set up you have.

You may call the supplier/installer of your system and he will tell you a new HN7000S modem will cost $ 800.
How can that be when you have paid for your complete system, dish, cables, modem, installation, a meagre $ 200 ?

You may want to do some research about this Hughes HN7000S modem.
And find out that as a customer and user you are in a position of disadvantage.
Because Hughes and its dealers/installers have put so many advantages on their side.

First of all, a modem has been made connected to a subscription to a service provider of satellite internet connection.
Like you can't buy an iPhone without a AT&T contract.
So, it is not that you simply can buy a modem and switch the broken one for the new one.
Each modem has a specific number and your subscription and internet access only works with the one you had from the beginning and registered with the service provider.

Second, modems can only be bought from certified Hughes distributors and installers.
They are not for sale in Wal*Mart.
And between Hughes and their dealers/installers is in all probability a complex system of bonuses, percentages and sharing, the customers don't know anything about.

Therefore, when the modem breaks down, you call your installer.
Who will come with a new modem.
Replace the broken one and inform the service provider of the switch of modem.
So that in their computers the assigned registration is changed and customer can return on the internet.
And how much is that?
$ 800 plus tax and maybe service costs, thank you very much.

Now, a smarter person will go to the local library where is internet also and roam to check where to find a cheaper solution for the problem of the broken modem.
To find a company in Montana, Montana Satellite Supply, that sells new HN7000S modems that are without contracts with a service provider.
Unlocked ones therefore.
How much?
$ 449,95 + tax +shipping/handling.

You could order this modem, connect it yourself and then call your service provider to request a change of modem assignment.
They may charge for that though.

But you also will wonder why a new Hughes HN7000 modem together with a satellite disk and everything else needed costs $ 200, a single new modem in most places $ 800 and in Montana $ 449,95.

To make things even more absurd, the modem in the Fuso Szulc broke down while in Mexico.
To buy a new modem in the USA and have it shipped to Mexico is not really an option.
Takes a long time, weeks, and the Mexican customs may charge up to 60 % import tax.

But no despair.
In Mexico they also have Hughes satellite internet distributors/installers.
For how much do they sell a brand new HN7000S modem with two years guarantee including setup and helpdesk?
$ 300 thank you very much again.

Obviously this HN7000S modem is an object that is used to make money.
Its real value may be less than $ 100.
But it is made into a tool to squeeze as much money out of the customers as possible.

It is pretty amazing that these kinds of business practices are legally allowed.
A customer who has a modem that breaks down must buy the same one: that is how it is designed.
And next the customer is made to pay a fortune in order to replace the modem.

These kinds of monopolistic business methods are very much in the disadvantage of the customers.
Who obviously are not protected by their government.
This is different in Belgium and Italy.
Also in those countries iPhone wanted to practice their monopolistic marketing.
Offering an iPhone including a two year contract with one specific phone company.
No choice: that or nothing.
The governments of Italy and Belgium believed this was not a demonstration of fair business.
A person that buys a cell phone must have the freedom to chose which plan with which phone company it prefers.
Therefore, by law, in Italy and Belgium iPhones are sold unlocked by Apple itself.

The customer in the USA with a broken modem has another option though.
A ridiculous one.
When the modem breaks down after two years, the contract with the service provider can be cancelled.
Next, a whole new setup is ordered.
For $ 200 a new dish, cables and modem will be installed.
To throw away the two year old dish.
Instead of paying $ 800 to have only the modem replaced.

Two warnings:

on the market are also refurbished HN7000S modems.
It is not always made clear if the price mentioned means a brand new one or a used one.
Be aware and check before making the purchase.

The HN7000S modem for $ 300 in Mexico comes with a two year subscription.
It means canceling the existing account and opening a new one.
This can be done but the purchase of the modem, the delivery, the installation and the assigning is a not very simple procedure and one really needs help of an expert.
In La Paz, Baja California, Mexico is a most friendly and highly experienced expert who can do it for you:
Hans Krakaur to contact at:


1 comment:

Anonymous said...

The answer why the whole system is 200 and the modem itself is 800 is the same as a cellphone here in Germany with a contract is 1 € and without is 400 €: it is subsedised.

Look at this German ad:,Kostenloser-Motorroller_2-x-Nokia-1650-Tarif-selbst-waehlen,1223561.html

You get even 2 free cellphones and a free motorscooter if you sign a 2 year contract. So do you think the company loses money??? Hey they are on national TV every night to advertise for it.

Maybe they are just giving away money!?!... No, they are charging 2 x 30 € for the contracts = 1440 € in 2 years. And they make money on the minutes as well! But the people only see the gift!!