FCC Might Fine Hilton Hotels Over Wi-Fi Hotspot Blocking

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By Brandon Ross

Nov. 2 — The Federal Communications Commission is proposing to fine Hilton Worldwide Holdings Inc. to try to get the global hotel chain to comply with an investigation into alleged illegal blocking of personal Wi-Fi hotspots at its hotels.

The agency is preparing to fine Hilton $25,000 for apparently not complying with the FCC Enforcement Bureau's request for information in relation to the agency's investigation of the practice. “Significantly higher” fines could be on the way if Hilton doesn't act swiftly to meet the bureau's demands, FCC documents released Nov. 2 said.

The proposed fines against Hilton come as the FCC continues to crack down on companies blocking personal Wi-Fi hotspots at their hotels and convention centers. In October 2014, the agency previously fined Marriott International Inc. and Marriott Hotel Services Inc. $600,000 combined for similar blocking activities at a Nashville convention center. Smart City Holdings LLC was fined $750,000 for Wi-Fi hotspot blocking at multiple convention centers.

In addition to the proposed Hilton fines, the FCC Nov. 2 announced its plans to fine M.C. Dean Inc. $718,000 over Wi-Fi hotspot blocking at the Baltimore Convention Center.

Hilton Issues Rebuttal

Hilton issued a statement that called the FCC action unwarranted.

“Hilton supports open access to private Wi-Fi networks for our customers through their personal devices, while at the same time protecting their personal information,” the company said. “We have a policy in place that states our commitment to secure open access and prohibits hotels from blocking Wi-Fi, and it is repeatedly communicated to all properties. Throughout this inquiry, we have cooperated with the FCC, providing extensive background and details in a timely and efficient manner. We believe that the FCC has no basis for vastly expanding the initial inquiry based on a single complaint at a single Hilton hotel.”

The FCC issued a warning to the whole commercial services industry in January against Wi-Fi hotspot blocking, saying that violators could face enforcement actions. In that warning, the FCC said blocking Wi-Fi hotspots is illegal under Section 333 of the amended Communications Act.

In a Nov. 2 press release, the FCC said: “In today's order, the Bureau directs Hilton to immediately provide essential information and documents about its Wi-Fi management practices and warns the company that it may face a significantly higher fine for any continued obstruction or delay.”

“To permit any company to unilaterally redefine the scope of our investigation would undermine the independent search for the truth and the due administration of the law,” Enforcement Bureau Chief Travis LeBlanc said in the press release.

Year-Long Investigation

According to the FCC documents, Hilton has 30 calendar days to respond to the FCC's 2014 letter of inquiry to the company and 15 calendar days to respond to a “critical” letter of inquiry issued in a Nov. 2 Notice of Apparent Liability for Forfeiture and Order.

According to the FCC, its been trying, unsuccessfully, to get the documents in question from Hilton for nearly a year.

“In August 2014, the Commission received an initial consumer complaint alleging that the Hilton in Anaheim, California blocked visitors' Wi-Fi hot spots unless those consumers paid a $500 fee to access Hilton's Wi-Fi,” the agency's Nov. 2 release said. Other Hilton locations were reported to have implemented the hotspot blocking as well, the release said.

“In November 2014, the Bureau issued Hilton a letter of inquiry seeking information concerning basic company information, relevant corporate policies, and specifics regarding Wi-Fi management practices at Hilton-brand properties in the United States,” the FCC said. “After nearly one year, Hilton has failed to provide the requested information for the vast majority of its properties.”

The agency again urged commercial establishments to review their practices to double-check that they aren't blocking Wi-Fi hotspots.

“In the 21st Century, Wi-Fi represents an essential on-ramp to the Internet. Personal Wi-Fi networks, more commonly known as ‘hotspots,' provide an important avenue for consumers to connect to the Internet,” the agency's notice letter to Hilton said. “We have now advised on several occasions that the Communications Act prohibits any person or business from maliciously blocking or disrupting the lawful operation of neighboring Wi-Fi networks.”

To contact the reporter on this story: Brandon Ross in Washington at bross@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

The full FCC letter of inquiry to Hilton is available here: http://src.bna.com/SM.


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