FCC Fines Smart City $750,000 for Blocking WiFi

Blocked mobile hot-spots
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Blocked mobile hot-spots
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WASHINGTON — The Federal Communications Commission’s Enforcement Bureau today announced a $750,000 settlement with Smart City Holdings for blocking consumers’ WiFi at various convention centers around the United States. Smart City, an Internet and telecommunications provider for conventions, meeting centers and hotels, had been blocking personal mobile “hotspots” that were being used by convention visitors and exhibitors who used their own data plans rather than paying Smart City substantial fees to use the company’s WiFi 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 WiFi 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 WiFi connections are on notice that such practices are patently unlawful.”

In providing service at convention centers, Smart City charged exhibitors and visitors a fee of $80 to access the company’s WiFi services for a single day. The FCC’s investigation revealed that, if exhibitors or visitors to the convention centers did not pay this $80 fee, Smart City would automatically block users from accessing the Internet when they instead attempted to use their personal cellular data plans to establish mobile WiFi networks – or “hotspots” – to connect their WiFi-enabled devices to the Internet. As part of the settlement, Smart City will cease its WiFi blocking activities and will pay a $750,000 civil penalty.

In response to this action, Smart City released the following statement: “Smart City Networks, the largest independent provider of managed network services to the convention and trade show industry, today announced it has entered into a Consent Decree with the Federal Communications Commission (FCC) that resolves an investigation related to the use of enabling technologies for managing and protecting WiFi networks. As part of the Consent Decree, Smart City did not admit liability, and the FCC did not find that Smart City violated any laws.”

In June 2014, the Commission received an informal complaint that consumers could not connect to the Internet at several venues where Smart City provided WiFi service. The Enforcement Bureau’s investigation revealed that Smart City automatically blocked consumers from using their own “rogue” WiFi networks at several convention centers the company serves, including the convention centers in Cincinnati, Columbus, Ohio; Indianapolis, Orlando, Florida, and Phoenix. No evidence exists that the WiFi blocking occurred in response to a specific security threat to Smart City’s network or the users of its network.

This is the FCC’s second major enforcement action regarding Wi-Fi blocking. In October 2014, the FCC fined Marriott International and Marriott Hotel Services $600,000 for similar WiFi blocking activities at the Gaylord Opryland Hotel and Convention Center in Nashville, Tenn.