Smart City Holdings, a provider of Wi-Fi for convention centers and hotels, has been fined $750,000 by the FCC for illegally blocking personal hotspots. According to the FCC, the firm charges $80 per day to visitors and exhibitors at convention centers in Indianapolis, Cincinnati, Columbus, OH, Orlando, and Phoenix.
Those refusing to pay the exorbitant daily rate for Wi-Fi access to the web would have their personal hotspot ability blocked, yielding them unable to access the web on the trade show floor.
A statement by Travis LeBlanc, Chief of the FCC's Enforcement Bureau makes it clear that this is an illegal act and will not be tolerated.
"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. All companies who seek to use technologies that block FCC-approved Wi-Fi connections are on notice that such practices are patently unlawful."
The fine is the result of an FCC investigation that followed a complaint from an attendee at a convention in June of last year.
This is the second firm the FCC has fined for the practice of blocking personal connectivity to promote expensive service. Last year, ZDNet reported the $600,000 fine assessed Marriott for blocking personal web access in its Gaylord Opryland Hotel and Convention Center.
Marriott denied at the time that the practice was illegal, but subsequently announced it would stop the practice.
UPDATE. A Smart City representative emailed ZDNet with this statement from Mark Haley, President of Smart City:
Our goal has always been to provide world-class services to our customers, and our company takes regulatory compliance extremely seriously. We are not gatekeepers to the Internet. As recommended by the Department of Commerce and Department of Defense, we have occasionally used 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. This activity resulted in significantly less than one percent (1%) of all devices being deauthenticated and these same technologies are widely used by major convention centers across the globe as well as many federal agencies.
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. But when we were contacted by the FCC in October 2014, we ceased using the technology in question.
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. As a result, we've chosen to work cooperatively with the FCC, and we are pleased to have resolved this matter. We are eager to return our energies to providing leadership to our industry and delivering world-class services to our clients.