FCC Fines Smart City $750,000 for Jamming Mobile Hotspots

By Ellen Muraskin

The FCC has established, again, that nobody can make you overpay for their Wi-Fi when you’ve brought your own.

In a decision that should please cellular providers and their mobile hotspot customers, the Commission slapped Smart City Holdings with a $750,000 civil penalty for denying convention visitors access to their own mobile hotspots. The company, ISP to convention centers and hotels, was using a Wi-Fi monitoring system to detect and block such personal wireless networks, with the aim of socking exhibitors and visitors with an $80-per-day charge for its own Internet service.

“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,” said Travis LeBlanc, chief of the FCC’s Enforcement Bureau. “All companies who seek to use technologies that block FCC-approved Wi-Fi connections are on notice that such practices are patently unlawful.”

For its part, Smart City issued a statement by President Mark Haley, making it clear that its consent decree did not admit liability or illegality in the matter. The provider claims that the Wi-Fi blocking activity caused less than 1 percent of all devices being de-authenticated, and that such blocking technologies are “widely used by major convention centers across the globe as well as many federal agencies.”

On the FAQ page of its website, Smart City says it provides free Wi-Fi in designated public areas of the events it covers, such as the lobbies, food courts, restaurants and some of the conference rooms. It draws a distinction between those public areas and exhibit halls, which it describes as “typically licensed to a company, government agency, or trade association for a private event.”

Such license, it says, governs the availability of a range of services for the event, which may or may not include free Wi-Fi.

The complaint that brought the FCC to act, however, was not about the absence of free Wi-Fi, but the active disabling of visitors’ own cellular access to personal mobile Wi-Fi. In any event, Smart City is not looking for prolonged litigation of this issue. As part of the consent decree, the company will cooperate with the FCC and refrain from such activity in the future.

This is the FCC’s second major enforcement action regarding Wi-Fi blocking. The first was a $600,000 judgment against Marriott International Inc. and Marriott Hotel Services Inc. for similar Wi-Fi blocking activities at the Gaylord Opryland Hotel and Convention Center in Nashville, Tennessee. The FCC’s penalty is based on federal law that prohibits the marketing, sale, or use of cellular, Wi-Fi or GPS jammers.

Read the Smart City Consent Decree here.