The Enforcement Bureau of the FCC announced the signing of a consent decree under which Smart City Holdings LLC, a provider of Internet and other telecommunications services to convention centers, agreed to pay a civil penalty of $750,000 to settle allegations that it intentionally blocked usage of personal mobile Wi-Fi hotspots by convention visitors and exhibitors who sought to rely upon their own data connections instead of paying substantial fees to access the Smart City Wi-Fi service.
Announced Tuesday, the consent decree represents the FCC’s second major enforcement action in a year against Wi-Fi blocking. Last October, the FCC fined Marriott International $600,000 for interfering with the personal Wi-Fi connections of guests at the company’s Gaylord Opryland resort in Nashville, Tennessee. In that ruling, Enforcement Bureau officials determined that Marriott employees had used “containment features of a Wi-Fi monitoring system” to prevent guests from accessing personal mobile hotspots in violation of Section 333 of the 1934 Communications Act, which forbids willful or malicious interference “to any radio communications of any station licensed or authorized by or under this chapter.”
Spurred by a June 2014 complaint, the Enforcement Bureau launched an investigation revealing that Smart City charged visitors and exhibitors $80 per day to access the company’s Wi-Fi service at various convention sites throughout the country. If visitors and exhibitors refused to pay the $80 fee, Smart City would block such users from accessing the Internet through personal Wi-Fi hotspots supplied through their paid cellular data subscriptions. While affirming that such conduct was reported at Smart City convention venues that include Cincinnati, Orlando, and Phoenix, the FCC further noted that “no evidence exists that the Wi-Fi blocking occurred in response to a specific security threat to Smart City’s network.”
As it admitted to occasional use of “technologies made available by major equipment manufacturers to prevent wireless devices from significantly interfering with and disrupting the operations of neighboring exhibitors on our convention floors,” Smart City maintained that “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.” Nevertheless, under the terms of the consent decree, Smart City has agreed to refrain from such blocking practices and to submit periodic compliance reports to the FCC. Proclaiming it “unacceptable for any company to charge customers exorbitant fees to access the Internet while . . . blocking them from using their own personal Wi-Fi hotspots,” FCC Enforcement Bureau Chief Travis LeBlanc declared: “all companies who seek to use technologies that block FCC-approved Wi-Fi connections are on notice that such practices are patently unlawful.”