[ILUG] Linux Appliance & a GPL query

[AJ McKee]

Hi All,

We have a Linux product (A firewall appliance) which is managed by a third
party company. I was having a look at it the other day and stumbled across
its license terms. I have pasted the terms below, but just before I mail the
fsf ppl and all other parties concerned, I said I would mail it here to get
opinion on it. Below are the license terms that are causing me difficulty.
My main question being is the offer to give the source code out but to
charge a admin/media fee reasonable.

Many thanks in advance
AJ

<snip>
Licenses 

This product is licensed under two main licenses. The first is the Vendor
License, which covers proprietary software under the Vendors copyright. The
second is the GPL, which covers freely available software included in each
of the Vendors appliance 


Under the GPL, the Vendor is obligated to provide, upon request, copies of
source code licensed under the GPL. If you would like to obtain such code,
please provide: 

Payment of HK$1,000 (covering disk media and preparation time) 
   

Please allow 14 days to process your request.
</snip>