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Communications Government Wireless Networking

FCC Fines Smart City $750K For Blocking Wi-Fi 188

schwit1 writes: FCC's Enforcement Bureau today announced a $750,000 settlement with Smart City Holdings, LLC for blocking consumers' Wi-Fi at various convention centers around the United States. Smart City, an Internet and telecommunications provider for conventions, meeting centers, and hotels, had been blocking personal mobile 'hotspots' that were being used by convention visitors and exhibitors who used their own data plans rather than paying Smart City substantial fees to use the company's Wi-Fi service.
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FCC Fines Smart City $750K For Blocking Wi-Fi

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  • Fine vs profit? (Score:5, Insightful)

    by rossz ( 67331 ) <<ogre> <at> <geekbiker.net>> on Tuesday August 18, 2015 @02:56PM (#50341963) Journal

    If the fine isn't substantially more than the profit they made from blocking wifi, there is no incentive to stop the practice. The fine will be just another cost of doing business.

    • Re:Fine vs profit? (Score:5, Insightful)

      by itzdandy ( 183397 ) on Tuesday August 18, 2015 @03:04PM (#50342031) Homepage

      the first fine is a slap on the wrist, but if they continue the next fine will be substantially larger, order of magnitude larger. The FCC might only slap on the wrist for 1st offense, but they get real serious when people don't follow their direct orders.

      • Re:Fine vs profit? (Score:5, Informative)

        by FranTaylor ( 164577 ) on Tuesday August 18, 2015 @03:08PM (#50342069)

        the first fine is a slap on the wrist, but if they continue the next fine will be substantially larger, order of magnitude larger. The FCC might only slap on the wrist for 1st offense, but they get real serious when people don't follow their direct orders.

        they signed a settlement agreement in the court room, so further infractions are really "contempt of court" with immediate jail for the offenders

        • true, but that doesn't release them from FCC liability either. And the chances of a settlement are near zero for a second offense. I've seen second FCC fines in another wireless industry, they are no joke.

          • by Ol Olsoc ( 1175323 ) on Tuesday August 18, 2015 @08:53PM (#50344037)
            Blocking is a rather nice word for jamming, and jamming gets the FCC's attention very quickly.

            They will even kick ass on Power companies that inadvertently create a lot of interference via power line issues like cracked insulators, and other such oddities that create sparking or other noise issues.

            If a noise complaint occurs, and it checks out, the FCC sends a nice letter - If fixed, everyone is happy. If not, a nastygram is delivered. If fixed, everyone is happy. It still not fixed, they bitchslap the company with a fine, or forfeiture as they call it. That forfeiture is really hard to get out of, given the chances they give.

            A second offense? I've never seen one, but it would be really foolish. I'll have to look up what happens then

            Some times a power company has someone who doesn't take the complaints seriously, perhaps since most of them come from Radio Amateurs. But the Hams are a licensed service, and have the equipment and wherewithal to find the problems. So they carry a lot of veracity.

            But to the topic at hand, a 750,000 fine might be considered a lucky break for Smart City, who were definitely not being smart. Another time? Be probably like pissing off Mr Bigglesworth.

        • how exactly do you jail a corporation?
          • corporations are owned by people, they are responsible for its actions

            • Corporations are USUALLY owned by shareholders not individuals. And such is the case of Smart City so it would likely be THESE [corporationwiki.com] people who were held accountable.
            • So if your grandma bought you 1 share of stock in a company that did something illegal for your birthday, you get to go to jail. Nice.
              • by rtb61 ( 674572 )

                Imagine how well behaved corporations would be if shareholders were imprisoned for the actions of the corporations by which they generate profits. What do you think share value would be for ill behaved corporations that break laws and their share holders are punished. You might think that sounds awful but consider this, what is the punishment for citizens of a country that goes to war, summary random public execution. So if every citizen comes under threat when countries do bad things why shouldn't every s

          • by flacco ( 324089 )

            You can give a corporation a death sentence by revoking its charter. I think?

          • by Lehk228 ( 705449 )
            you jail the officers of the corporation.
        • by Overzeetop ( 214511 ) on Tuesday August 18, 2015 @03:16PM (#50342163) Journal

          The day I see a corporation behind bars is the day they'll start to listen. Now, if you were to "jail" them by requiring a halt of all stock trades, impound all assets, suspend all business operations, and revoke the corporate status and protection for all holdings and subsidiaries for the length of the jail term. That would get people's attention.

          • The day I see a corporation behind bars is the day they'll start to listen.

            http://www.bloomberg.com/news/articles/2014-12-19/ex-billionaire-timothy-blixseth-jailed-for-contempt-of-court-1-

            they most certainly do put corporate executives in jail for contempt of court

          • I think that halting all stock trades would be enough. Especially if the halting is done a few hours after a warning to make the stock price drop really low.

          • That would be a death sentence.

          • Most of the things you list would punish the stock holders, who are just as likely to be a pension plan for retired veterans. You want to punish those responsible, not the senior citizens who got blindsided by the crimes of someone else.
            • by plover ( 150551 )

              Most of the things you list would punish the stock holders, who are just as likely to be a pension plan for retired veterans. You want to punish those responsible, not the senior citizens who got blindsided by the crimes of someone else.

              Are you kidding? No retirement plan or index fund is heavily invested in a single stock, just in case something happens to the stock price. Corporate malfeasance is just one of many possibilities, so fund managers hedge their bets and spread the risk amongst dozens or hundreds of stocks. You're not going to seriously hurt grandpa Joe by bankrupting these slimeballs.

              Regardless of their percentage of investment, the actions of the company are indeed the responsibility of the stockholders. While they may no

        • by NoKaOi ( 1415755 )

          they signed a settlement agreement in the court room, so further infractions are really "contempt of court" with immediate jail for the offenders

          Please tell me this is sarcasm and you don't actually think this would ever happen.

          • Re:Fine vs profit? (Score:5, Interesting)

            by FranTaylor ( 164577 ) on Tuesday August 18, 2015 @03:25PM (#50342259)

            you can find this on google if you look:

            Marvin Chaney, 61, founder of RoboVault, was taken into custody by U.S. Marshals on January 29 on the orders of U.S. Bankruptcy Judge John K. Olson for violation of court orders.

            Brandon bankruptcy attorney O. Reginald Osenton commented, “This goes to show you how important it is to follow carefully a judge's instructions, no matter what type of case you are involved in.”

            Olson issued the arrest order after Chaney and his attorney, Lawrence Wrenn, did not show up for a court hearing on January 17. Appearing shackled before the judge, Chaney said that Wrenn had advised him not to attend the hearing and that he had tried his best to produce the records that had been requested of him.

        • You keep saying the same thing again and again. Are you legit? Or are you connected with SmartCity somehow? Don't want to call you a shill without evidence. But I have not seen any serious top company officials go to jail for anything. Not for causing oil rig explosion that killed people, oil spills, coal ash wash outs, nearly destroying the global financial system, lying about the company prospects... nothing seems to put the top bosses in jail. And you keep parotting as though if I catch them blocking wif
          • Not for causing oil rig explosion that killed people, oil spills, coal ash wash outs, nearly destroying the global financial system, lying about the company prospects... nothing seems to put the top bosses in jail.

            Have any of those people signed consent decrees, agreeing that they are guilty of contempt of court if they violate the decree?

            • I dont know what these guys have signed, and what kind of loop holes are built into the consent decree.
              • RTFA:

                "As part of the settlement, Smart City will cease its Wi-Fi blocking activities"

                Where is the loophole? Consent decrees are intentionally made very simple and straightforward so there are no loopholes.

          • But I have not seen any serious top company officials go to jail for anything. Not for causing oil rig explosion that killed people, oil spills, coal ash wash outs, nearly destroying the global financial system, lying about the company prospects.

            Sure you have. Just from the MCI/Worldcom case:

            Bernie Ebbers, CEO - 25 years (he'll probably die in prison)
            Scott Sullivan, CFO - 5 years
            David Myers, controller - 1 year
            Buford Yates, director of accounting - 1 year
            Betty Yates, accounting manager - 5 month
        • by msauve ( 701917 )
          "they signed a settlement agreement in the court room"

          Source? The link will take you to a link with the consent decree, which was directly between the FCC and Smart City. I don't see where a court was involved anywhere.
      • the first fine is a slap on the wrist,

        I would describe this as a "tap on the wrist".

        • $3/4 Million is a big chunk out of managements bonuses I think...

          • Since corporations are purely de jure entities, that only exist through fiat, through laws that state that they can exist and theoretically regulate how they can exist, how about additional rules that impose that fines and punitive damages are exclusively imposed on the part of their budget that's used for management bonuses?
  • $750K only? (Score:4, Insightful)

    by Virtucon ( 127420 ) on Tuesday August 18, 2015 @02:57PM (#50341965)

    Seems the fine doesn't fit the crime.

  • More like dumb city. Very dumb city.

  • Smart City not so smart. And proving once again that acting like a dick is not a best practice.
    • It's headquartered in Florida. Ain't Florida a hot bed for corrupt corporate activities? I would count Arizona as a hotbed for corrupt corporations as well.
      • The Enforcement Bureau’s
        investigation revealed that Smart City automatically blocked consumers from using their own “rogue”
        Wi-Fi networks at several convention centers the company serves, including the convention centers in
        Cincinnati, Ohio; Columbus, Ohio; Indianapolis, Indiana; Orlando, Florida; and Phoenix, Arizona.

  • How much of that $750,000 fine goes to the people who had to pay $80/day for Internet service because they couldn't use their WiFi hotspot? I'm going to guess the answer is $0
    • by FranTaylor ( 164577 ) on Tuesday August 18, 2015 @03:12PM (#50342115)

      How much of that $750,000 fine goes to the people who had to pay $80/day for Internet service because they couldn't use their WiFi hotspot?

      I'm going to guess the answer is $0

      They can have all of the $80 back after they file a $100 fee

      • One thing I remember from watching court TV shows such as 'Judge Judy' is that a criminal conviction is pretty much a slam dunk in a liability case.

        So, since their actions amounted to extortion(We illegally blocked your signal so you had to pay us), this is now ripe for small claims cases and/or a class action lawsuit.

        BTW, that $100 fee for a small claims court case? That $80 for the service you were illegally forced to buy just turned into a $180 claim, plus a few other things, most likely.

        Then, if they d

        • Do you really assert that corporations are going to hire lawyers, fill out depositions, etc. to recover an $80 fee? you are dreaming. There is no way it is worth the effort.

          • Do you really assert that corporations are going to hire lawyers, fill out depositions, etc. to recover an $80 fee? you are dreaming. There is no way it is worth the effort.

            Nope, they send a $10/hour intern down to the local courthouse to file a small claim, and add the intern's hours onto the bill.

            You should have recognized this by the words 'small claims court'. They explicitly don't require lawyers or do depositions.

            You show up with your receipt or credit card bill for the $80, a copy of the court case(printed off the internet is 'good enough' in small claims), and the judge will likely give you the judgement, especially if the company doesn't send somebody, such as anothe

    • by Virtucon ( 127420 ) on Tuesday August 18, 2015 @03:13PM (#50342125)

      None of it, it'll all go into the general fund and within nanoseconds it'll disappear to pay for F-35 parts.

    • How much of that $750,000 fine goes to the people who had to pay $80/day for Internet service because they couldn't use their WiFi hotspot? I'm going to guess the answer is $0

      Nope. Those people would have to individually sue. It would be better for those hypothetical plaintiffs if Smart City hadn't got to settle, but even the settlement would seem to indicate fault.

  • We were ahhh...ensuring quality control by filtering out potentially disruptive signals, Yeah, that's the ticket!

    .
    • We were ahhh...ensuring quality control by filtering out potentially disruptive signals, Yeah, that's the ticket! .

      I'm sure they tried to use that argument but the FCC saw right through the veneer. Furthermore, they tried claiming it was to prevent attacks on their network but SmartCity couldn't prove that they were being attacked.

  • by gurps_npc ( 621217 ) on Tuesday August 18, 2015 @03:21PM (#50342213) Homepage
    Every single person that attended their events should join a class action law suit.
    • I smell class action suite m'self. Sue them out of existence.
    • Why? So they can get a voucher for $10 off from their next WiFi use?

      I'm still waiting for the day a Class Action suit actually benefits anyone other than the lawyers for both parties.

  • I clicked on the link but it doesn't say what Smart City did exactly, it just says they "blocked" it.

    Was it by using an active jammer? Was it with lead paint or a Faraday cage? Or?

    • FCC doesn't get involved with Faraday cages as they're legal. Lead paint would have many agencies OTHER than the FCC coming, and at that point a $750k fine would be the least of their concerns. OSHA, EPA, FDA if food is served in the building, etc...

      If they use the aluminum-iron oxide paint that's available for the stated purpose, it's the same as a Faraday cage, legal.

      Nope, if the FCC is involved they were jamming via active broadcast.

    • Something to do with deauth packets on any other ap in range.. so nobody could connect to ANY ap other than theirs.... diabolical...

      • Something to do with deauth packets on any other ap in range.. so nobody could connect to ANY ap other than theirs.... diabolical...

        Yep. And it's not like they warned the companies renting the booths. I had one demo fail and require emergency workarounds because of these clowns. We just wanted to broadcast a LAN connection across the booth to avoid having to run cabling under our carpeting. No internet or anything.

  • I'm curious if anyone has witnessed this in action, do they block cell signals entirely? If they're jamming WiFi spectrum for example, you could still use your phone for data, or tether it to a PC or router/wired LAN. If they're blocking cell signals entirely, all it would take is one medical emergency where someone couldn't get a call out to 911, huge liability. I suppose they could also jam bands so that phones could only obtain a sluggish 2G data signal, then calls and texts would still work but data wo
    • by ColdWetDog ( 752185 ) on Tuesday August 18, 2015 @04:50PM (#50342939) Homepage

      If you read the ARS [arstechnica.com] article on this, you would see that:

      "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."

      • by EXrider ( 756168 )
        Interesting, so a savvy user could circumvent this nonsense by tethering their hotspot (or smartphone) via USB or Bluetooth.
        • Interesting, so a savvy user could circumvent this nonsense by tethering their hotspot (or smartphone) via USB or Bluetooth.

          Only if you just needed a WAN connection on a single machine. If you wanted to create a WLAN as a presenter, you were SOL.

        • by gl4ss ( 559668 )

          well, they could have.
          but it wouldn't have been wifi then.

          but why should they, when interfering with other networks is illegal.

          mind you, had this been some 18 year old kid doing that deauthing, then he would be in prison for hacking now. so the world isn't fair.

    • I'm curious if anyone has witnessed this in action, do they block cell signals entirely?

      They most likely didn't block cell signals, but had transmitters up in a 'active mode' that would spam disconnect notices to any wifi that wasn't using their SSID. Such are 'readily' commercially available. It was even an option on a system I was involved in the installation of, which for security purposes included pure-monitor stations that did nothing but listen for 'rogue' wifi signals...

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