NEWS ANALYSIS: The Federal Communications Commission levied a $750,000 fine against Smart City Networks for blocking WiFi hotspots, but more such actions may be coming.
The Federal Communications Commission has served notice that Smart City Networks is unlikely to be the last organization to face enforcement action for blocking private hotspot WiFi signals in public spaces.
The FCC entered into a consent agreement with Smart City Networks
in which the company agreed to pay the commission a fine of $750,000 and agreed to stop blocking WiFi hotspots at conventions and other events where the company broadcast its own WiFi service.
Prior to this, Smart City would block WiFi signals by sending a de-authorizing code to WiFi radios, making them drop their connections. To overcome this problem, Smart City helpfully offered its own WiFi service for $80 a day.
A consent agreement is a legal procedure in which the party that's found in violation agrees to stop doing whatever it was doing without admitting that it violated any laws or regulations. The government, in return, doesn't charge them with a crime.
Had Smart City decided to fight the charges in court, it's conceivable that it could have been found not guilty of blocking WiFi signals, but as is usually the case in situations like this, the company's chances were small, and the downsides in terms of fines and potentially jail time for senior corporate executives were high.
The problem that the FCC tried to deal with in this case is potentially huge, and it goes far beyond just Smart City this year and a case involving Marriott in 2014.
The FCC Enforcement Bureau "has seen a disturbing trend in which hotels and other commercial establishments block wireless consumers from using their own personal WiFi hot spots on the commercial establishment’s premises," according to a statement provided to eWEEK
by an FCC spokesperson.
"As a result, the Bureau is protecting consumers by aggressively investigating and acting against such unlawful intentional interference," the statement said.
The commission also served notice that it was already looking into other complaints about WiFi signal blocking.
"Following the (Marriott) settlement, the Enforcement Bureau has received several complaints that other commercial WiFi network operators may be disrupting the legitimate operation of personal WiFi hot spots. The Bureau is investigating such complaints and will take appropriate action against violators."
That statement was from a warning that the FCC issued
in January 2015 informing everyone that blocking of WiFi is illegal. Previously, the FCC had fined Marriott
for blocking WiFi hotspots at its Gaylord Opryland property in Tennessee.
The FCC's actions on WiFi blocking are parallel to a similar fight the agency has had regarding cell phone blocking, in which businesses, notably theaters and some restaurants, were blocking cellular signals in an effort to reduce interruptions due to phone calls.
In the consent decree
that Smart City and the FCC signed, Smart City has agreed to stop blocking WiFi signals and has agreed that it won't resume that activity.