Company pays FCC $750,000 for blocking Wi-Fi hotspots at conventions

A Wi-Fi service provider has agreed to pay the Federal Communications Commission $750,000 for blocking personal mobile hotspots used by convention visitors and exhibitors so they could avoid paying the company's $80-per-day fee.

Smart City Holdings automatically blocked users from using their personal cell phone data plans to establish mobile Wi-Fi networks, according to a statement published Tuesday by FCC officials. After the FCC took action against Smart City Holdings, the company pledged to stop the practice and pay the $750,000 fee to settle the matter.

It's the second enforcement action by the FCC taking aim at the blocking of FCC-approved Wi-Fi connections. In October, Marriott Hotel Services reached a $600,000 agreement with the FCC to settle allegations it interfered with and disabled Wi-Fi networks established by consumers in the hotel's conference facilities in Nashville. In January, the FCC issued an enforcement advisory that stated unequivocally Wi-Fi blocking was prohibited. Taken together, the moves should put hotels, convention centers, and just about everyone else on notice that it's unlawful to block FCC-approved Wi-Fi connections.

The FCC's action against Smart City Holdings stemmed from a complaint filed in June 2014 from a company that allows people to establish hotspots as an alternative to paying Wi-Fi service fees charged by a venue. The complaining company said customers couldn't connect to its equipment at several venues where Smart City operated. In responses to FCC investigators, Smart City later revealed it "automatically transmitted deauthentication frames to prevent Wi-Fi users whose devices produced a received signal strength above a present power level at Smart City access points from establishing or maintaining a Wi-Fi network independent of Smart City's network," according to a consent decree filed in the case.

In a statement, Smart City Holdings president Mark Haley said his company in the past used equipment that prevented wireless devices from interfering with operations of exhibitors on convention floors. The activity resulted in less than one percent of all devices being deauthenticated.

"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."

Smart City Holdings charged as much as $80 per day for Wi-Fi connectivity, the FCC said.

Post updated to add comment from Smart City Holdings.