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FCC fines company $750,000 for blocking Wi-Fi hotspots

FCC fines company $750,000 for blocking Wi-Fi hotspots

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Blocking Wi-Fi hotspots is getting very, very expensive. Today, the Federal Communications Commission announced a $750,000 fine against Smart City LLC, a boutique telecom company that provides Wi-Fi service for hotels and convention centers. Smart City typically charged users $80 a day to access the company's Wi-Fi networks, operating in convention centers in Cincinnati, Columbus, Indianapolis, Orlando, and Phoenix. In June 2014, the comission received a complaint that the company was using spectrum interference to prevent convention-goers from connecting through personal Wi-Fi networks, a violation of carriers' legal right to operate. Today's settlement includes both the $750,000 fine and an assurance that Smart City will cease all Wi-Fi blocking operations going forward.

It's the second major Wi-Fi blocking case the commission has taken up in the past year, following an October action that fined Marriott hotels $600,000 for a similar Wi-Fi blocking scheme in a hotel in Nashville. Two months later, the commission issued a formal advisory that it would be aggressively pursuing Wi-Fi blocking cases. "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 FCC enforcement chief Travis LeBlanc in a statement. "All companies who seek to use technologies that block FCC-approved Wi-Fi connections are on notice that such practices are patently unlawful."

Smart City described the settlement as a necessary compromise given the cost of litigation, but maintained that it had not acted maliciously. In a statement, Smart City president Mark Haley described the blocking techniques as a standard within the convention business, and said fewer than one percent of devices were deauthenticated by the system. "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," Haley said. "When we were contacted by the FCC in October 2014, we ceased using the technology in question."

12:09 PM ET:Updated to include statement from Smart City.