FCC fines Smart City $750K for blocking personal Wi-Fi

The telecommunications provider says it didn't know the rules, and only 1% of devices were blocked

(Come see Vator Splash LA on October 15. Speakers will include Adam Goldenberg Founder & CEO of JustFab; Brian Lee. Co-Founder & CEO of The Honest Company; Michael Dubin, Founder & CEO of Dollar Shave Club; and TJ Sassani, Founder & CEO of zozi. Get your tickets here!)

The idea of mobile hotspots, in which people can set up their own personal Wi-Fi network, has become a curiously contentious issue, especially from those that benefit from making people pay for Wi-FI access. Venues want to charge huge fees, people don't want to pay them, so who wins? For once, the people do. Don't you you wish that happened more often?

The Federal Communications Commission made its position on this clear earlier this, issuing a warning that blocking personal Wi-Fi is against the law, and that it "will take appropriate action against violators."

Now it is living up to that promise, revealing on Tuesday that it has levied a hefty fine against Smart City, an Internet and telecommunications provider for conventions, for violating that warning.

The company is being ordered to pay $750,000 for blocking personal mobile hotspots, which were being used by convention visitors and exhibitors, who did not want to pay the $80 per-day fee that Smart City was charging for Wi-Fi services. 

The FCC received an informal complaint in June of 2014 about consumers not being able to connect to the Internet at venues where Smart City was providing Wi-Fi. When the Commission investigated the complaints, it would that the company was blocking users who were trying to use mobile hotspots. 

Some of the venues where this occurred included the convention centers in Cincinnati, Columbus, Indianapolis, Orlando, and Phoenix.

For its part, Smart City issued a statement from Mark Haley, President of Smart City, in which he noted that, despite the settlement and fine, Smart City did not admit liability, and the FCC did not find that Smart City violated any laws.

“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," Haley said.

"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."

He maintains that less a one percent of all devices were deactivated. In addition, Smart City says that it had no prior notice from the FCC that it was violating any rules.

“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," Haley said. "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.”

The FCC has already come out against the first point that Smart City made, saying that "no evidence exists that the Wi-Fi blocking occurred in response to a specific security threat to Smart City’s network or the users of its network."

Many major tech companies have come out against the idea of blocking personal Wi-Fi, including Google and Microsoft, who each wrote letters to the FCC last year asking the Commission to vote against hotel chains that were lobbying to allow them to go ahead with the practice. 

Google was especially harsh in its condemnation, calling the blocking of personal Wi-Fi a public safety issue.

"Further, allowing hotels and other property owners to block communications with lawfully operated Wi-Fi access points could endanger guests on those properties. Consumers increasingly rely on Wi-Fi and VoIP technologies to make calls when carrier voice service is not available, and this includes calls to emergency services. Especially in a place of public accommodation, disconnecting network connections on which users rely puts health and safety at risk," Google wrote in its letter.

(Image source: omnichannel.me)