Washington, DC – Smart City Networks has settled a dispute with the federal government over allegations that the company violated access regulations by blocking third-party personal Wi-Fi hot spots used by trade show exhibitors.
Smart City signed a consent decree on August 17 and agreed to pay $750,000 to the U.S. Federal Communications Commission (FCC) rather than litigate the complaint in court. “While we have strong legal arguments, we have determined that mounting a vigorous defense would ultimately prove too costly and would be too great a distraction for our leadership team,” Smart City President Mark Haley said. “As a result, we have chosen to work cooperatively with the FCC, and we are pleased to have resolved this matter.”
In a written response, Smart City said that the company did not admit any wrongdoing in the consent decree, and claimed the FCC did not find that Smart City had violated any laws. “We have always acted in good faith,” Haley said, adding that Smart City was no longer using equipment that would interfere with personal Wi-Fi hot spots.
The FCC contacted Smart City last Fall in response to an informal complaint from Trade Show Internet, a vendor who provides equipment to establish Wi-Fi hot spots on trade show floors. The vendor alleged that Smart City had been blocking its customers from connecting to its hot spots, thereby forcing customers to purchase higher-priced similar services from Smart City.
The allegations were similar to those lodged last year against Marriott International, Inc. over Wi-Fi blocking at the Gaylord Opryland Hotel and Convention Center in Nashville. Marriott paid $600,000 to settle the matter.
“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,” said Travis LeBlanc, chief of the FCC Enforcement bureau, in a statement obtained by Trade Show Executive. “All companies who seek to use technology that blocks FCC-approved Wi-Fi connections are on notice that such practices are patently unlawful.”
The complaint was filed against Smart City by Trade Show Internet (TSI), a provider of a product called the 4G Internet Kit. With TSI’s kit, a trade show exhibitor can setup a dedicated Internet/WiFi hotspot in their booth, completely independent from a hotel or convention center’s network.
The complaint alleged that the 4G Internet Kit had the FCC’s seal of approval, but that Smart City violated an FCC rule that “prohibits willful or malicious interference with radio communications authorized by the commission.” Specifically, the complaint focused on the use of Wi-Fi de-authentication technology that prevents wireless devices from connecting to an access point other than Smart City’s.
“SCN’s (Smart City Networks) use of Wi-Fi de-authenication in convention centers constitutes illegal jamming,” the complaint contended, adding that contracts granting Smart City exclusive Wi-Fi rights within a convention center did not allow Smart City to restrict outside vendors.
Haley said Smart City was unaware that its technology violated any FCC regulations, and that the Departments of Commerce and Defense had, in fact, recommended the use of such technology to prevent hotspots installed in an individual booth from interfering with Internet access by other exhibitors. “This activity resulted in significantly less than 1% of all devices being de-authenticated,” he said. “These technologies are widely used by major convention centers around the globe as well as by many federal agencies.”
Reach the FCC’s Travis LeBlanc at (888) 225-5322 or travis.leblanc@fcc.gov; Smart City’s Mark Haley at (702) 943-6000 or mhaley@smartcity.com; Trade Show Internet’s Ian Framson, sales director and co-founder, at (866) 385-1504 or ian@tradeshowinternet.com or www.tradeshowinternet.com
