03 November 2015
FCC takes two enforcement actions on Wi-Fi
On November 2, 2015, the FCC issued two separate news releases on Wi-Fi blocking. In one action, the FCC announced a $718,000 fine against M.C. Dean, one of the nation’s largest electrical contracting companies, for blocking personal mobile “hotspots” of convention visitors and exhibitors who tried to use their own data plans at the Baltimore Convention Center to connect to the Internet rather than paying M.C. Dean substantial fees to use the company’s Wi-Fi service.
FCC fines Wi-Fi hotspot provider M.C. Dean
According to the FCC, as the exclusive provider of Wi-Fi access at the Baltimore Convention Center, M.C. Dean charges exhibitors and visitors as much as $1,095 per event for Wi-Fi access. Last year, the Commission received a complaint from a company that provides equipment that enables users to establish hotspots at conventions and trade shows. The complainant alleged that M.C. Dean blocked hotspots its customers had tried to establish at the Baltimore Convention Center. After receiving the complaint, FCC Enforcement Bureau field agents visited the venue on multiple occasions and confirmed that Wi-Fi blocking activity was taking place.
The Enforcement Bureau’s investigation found that M.C. Dean engaged in Wi-Fi blocking at the Baltimore Convention Center on dozens of occasions in the last year. During the investigation, M.C. Dean revealed that it used the “Auto Block Mode” on its Wi-Fi system to block consumer-created Wi-Fi hotspots at the venue. The Wi-Fi system’s manual describes this mode as “shoot first, and ask questions later.” M.C. Dean’s Wi-Fi blocking activity also appears to have blocked Wi-Fi hotspots located outside of the venue, including passing vehicles. The Commission charged M.C. Dean with violating Section 333 of the Communications Act by maliciously interfering with or causing interference to lawful Wi-Fi hotspots.
FCC fines and warns Hilton
In a separate announcement, unrelated except as to the subject matter, the FCC proposed a $25,000 fine against Hilton Worldwide Holdings, Inc. for “apparent obstruction of an investigation into whether Hilton engaged in the blocking of consumers’ Wi-Fi devices”. A consumer complaint alleged that Hilton was blocking visitor’s Wi-Fi in Anaheim, California in order to force them to pay a $500 fee to access Hilton’s Wi-Fi. Other complaints alleged similar Wi-Fi blocking at other Hilton-brand properties.
In November 2014, the FCC Enforcement Bureau sent Hilton a letter of inquiry requesting information concerning basic company information, relevant corporate policies, and specifics regarding Wi-Fi management practices at Hilton-brand properties in the United States. After nearly one year, Hilton has failed to provide the requested information for the vast majority of its properties. The proposed fine and announcement to Hilton included a demand to immediately provide the essential information and documents about its Wi-Fi practices, and warned that Hilton may face significantly higher fines for continued obstruction or delay.
FCC’s continuing strong enforcement policy
It is interesting that each FCC release regarding Wi-Fi blocking has listed its prior enforcement actions, starting with Marriott last October. For example, here is the concluding paragraph on the announcement regarding Hilton:
The Communications Act prohibits persons and companies from maliciously blocking Wi-Fi communications. The Commission has taken three Wi-Fi blocking enforcement actions since last year. In October 2014, the FCC fined Marriott International, Inc. and Marriott Hotel Services, Inc. $600,000 for similar Wi-Fi blocking activities at the Gaylord Opryland Hotel and Convention Center in Nashville, Tennessee. In August 2015, the FCC fined Smart City Holdings, LLC $750,000 for similar Wi-Fi blocking at multiple convention centers across the country. The Commission also recently proposed to fine M.C. Dean $718,000 for apparent Wi- Fi blocking at the Baltimore Convention Center. The Commission again urges hotels, convention centers, and other commercial establishments to review their practices to ensure that there is no unlawful blocking of Wi-Fi communications. [emphasis added]
Hoteliers, take note of the highlighted sentence. The FCC is serious — no Wi-Fi blocking! There is really no excuse to be doing this anymore. See “FCC Enforcement Advisory: Wi-Fi blocking is prohibited” dated January 27, 2015.
Jamming is a crime
As we pointed out a year ago when we discussed the FCC action against Marriott, it still looks like Marriott, Smart City, M.C. Dean and Hilton are getting off easy with just civil penalties. Federal law provides severe penalties for jamming cell phones and Wi-Fi, including:
- up to $112,500 for any single act and $16,000 per day for each continuing violation
- government seizure of the illegal equipment
- criminal penalties including imprisonment
See 47 U.S.C. §§ 401, 501, 503, 510; 47 C.F.R. § 1.80(b)(3).
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. Why don’t you give us a call (or send an email) and let us know what you working on? We would like to see if our experience might help you create value or avoid unnecessary pitfalls. Who’s your hotel lawyer?
Our Perspective. We represent hotel owners, developers and investors. We have helped our clients find business and legal solutions for more than $71 billion of hotel transactions, involving more than 3,800 properties all over the world. We bring this experience to any hotel project — big or small. Let’s explore how it might work for you. For more information, please contact Jim Butler at firstname.lastname@example.org or +1 (310) 201-3526.
Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group™. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why. Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.