Blocking personal Wi-Fi hotspots while charging "exorbitant" fees for online access is "patently unlawful," according to the U.S. Federal Communications Commission (FCC). That's why the agency today announced that it has fined a company called Smart City Holdings $750,000 for blocking access to Wi-Fi services at convention centers.
In October, the FCC imposed a fine of $600,000 on the Marriott Hotel Chain for similar Wi-Fi blocking at its Gaylord Opryland Hotel and Convention Center in Nashville. In January, the agency also issued an enforcement advisory warning that anyone intentionally blocking access to Wi-Fi hotspots would be subject to enforcement action.
Founded as a partnership between the Houston Astros and Central Telephone, Smart City Holdings has evolved into a company that provides network services to convention centers, as well as several NFL stadiums in the U.S. A subsidiary, Smart City Telecom, provides exclusive telecommunications services for the Walt Disney World Resort.
Blocking 'Patently Unlawful'
The FCC launched its investigation into Smart City Holdings after receiving a complaint that attendees at several venues where the company offered services could not connect to the Internet using Wi-FI hotspots. The agency found that the company's technology automatically blocked people from accessing their own networks via Wi-Fi hotspots at convention centers in Cincinnati; Columbus, Ohio; Indianapolis; Orlando and Phoenix.
The FCC's investigation also concluded that there was no evidence that Smart City was blocking Wi-Fi access due to legitimate network security concerns. The company charged attendees at those venues $80 a day to access its own Wi-Fi service.
"It is unacceptable for any company to charge consumers exorbitant fees to access the Internet while at the same time blocking them from using their own personal Wi-Fi hotspots to access the Internet," said Travis LeBlanc, chief of the FCC's Enforcement Bureau. "All companies who seek to use technologies that block FCC-approved Wi-Fi connections are on notice that such practices are patently unlawful."
Questions re: Security Concerns
Erik Stallman, director of the Open Internet Project and general counsel with the Center for Democracy and Technology, told us his organization welcomed the FCC's order as one that protects people's rights to access the Internet.
"It's clearly pretty important," he said, noting that Smart City's actions did not involve defensive blocking aimed at protecting user security.
"I understand their business model," said Brian Markus, CEO of Aries Security and a co-founder of the Wall of Sheep project designed to raise user awareness about Wi-Fi security. "But the airspace is not theirs to dictate and control."
While defenders of Wi-Fi blocking sometimes justify the practice as a way to protect against so-called "rogue access points," the strategy isn't justified if there are no legitimate security concerns, Markus told us. "What is a rogue access point?" he asked. "You're sharing network space."
Markus added that whenever he has encountered companies whose security-focused Wi-Fi blocking has prevented others from legitimately using network airspace, they have always been cooperative about resolving the problem.
"We have always acted in good faith, and we had no prior notice that the FCC considered the use of this standardized, 'available-out-of-the-box' technology to be a violation of its rules," said Mark Haley, president of Smart City, in a statement.
"While we have strong legal arguments, we've determined that mounting a vigorous defense would ultimately prove too costly and too great a distraction for our leadership team," he said. "As a result, we've chosen to work cooperatively with the FCC, and we are pleased to have resolved this matter."
Posted: 2015-08-18 @ 7:33pm PT
Mr. Haley should be double-fined for the lies he is now telling to justify the unjustifiable.