FCC slaps $750K fine on Smart City for blocking Wi-Fi

In its second major enforcement action against companies accused of blocking Wi-Fi, the FCC is reiterating that it's not tolerating Wi-Fi blocking of any kind, including at convention centers where getting access to Wi-Fi can be challenging even in the best of circumstances.

Smart City Holdings, a Las Vegas-based provider of managed network services for the convention and trade show industry, agreed to pay a $750,000 settlement after the FCC determined the company was charging exhibitors and visitors an $80 fee to use its Wi-Fi services for a single day. If exhibitors or visitors didn't pay the $80 fee, Smart City would automatically block them from accessing the Internet when they attempted to use their own personal cellular data plans to establish mobile Wi-Fi networks, or hotspots, to connect their Wi-Fi enabled devices to the Internet, the FCC said.

The FCC's investigation came after the commission in June 2014 received an informal complaint that consumers could not connect to the Internet at several venues where Smart City provided Wi-Fi service. The FCC's Enforcement Bureau found that Smart City automatically blocked consumers from using their own "rogue" Wi-Fi networks at several convention centers the company services, including those in Cincinnati and Columbus, Ohio; Indianapolis, Ind.; Orlando, Fla.; and Phoenix, Ariz.

As part of the consent decree with the FCC, Smart City did not admit liability, and "the FCC did not find that Smart City violated any laws," the company said in a statement on its website.

"Our goal has always been to provide world-class services to our customers, and our company takes regulatory compliance extremely seriously," Smart City President Mark Haley said in the statement. "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 percent) 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," he said.

Haley added that the company 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 the company was contacted by the FCC in October of 2014, it stopped 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," Haley said. "As a result, we've chosen to work cooperatively with the FCC, and we are pleased to have resolved this matter."

Earlier this year, Marriott International, the American Hotel & Lodging Association and Ryman Hospitality Properties withdrew their petition with the FCC that sought rules and clarity around Wi-Fi networking management tools -- also known as the "Wi-Fi blocking" petition. The petition set off a storm of protest from Wi-Fi advocates who criticized the hotel industry for seeking FCC permission to block personal Wi-Fi hotspots at their venues.

Marriott had to pay $600,000 to resolve its Wi-Fi blocking case with the commission. At the time of that settlement last year, Marriott said it also believed its actions were lawful as it had used FCC-authorized equipment provided by well-known, reputable manufacturers.

For more:
- see this FCC release
- see this Smart Cities statement
- see this Multichannel News story

Related articles:
Wi-Fi blocking rules apply to hospitals, FCC says
Marriott, AH&LA withdraw petition that set off Wi-Fi blocking protest
FCC: Do not block Wi-Fi, and jamming devices are illegal
Marriott pledges to not block personal Wi-Fi devices at its hotels
Marriott to pay $600K fine over Wi-Fi blocking allegations

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