Smart City, a provider of Internet services at convention centers and hotels, will pay the U.S. Federal Communications Commission $750,000 for kicking users off their personal hotspots to try and force them to use its Wi-Fi service.
The FCC's Enforcement Division found that at five venues across the U.S., the Smart City network sent coded messages called de-authentication frames to devices connected to personal hotspots, such as those created by smartphones.
The messages are sent by Wi-Fi base stations to terminate connections and in doing so, the FCC believes Smart City was trying to force users to pay its $80 daily fee for Internet connectivity.
"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 Travis LeBlanc, chief of the FCC’s Enforcement Bureau, in a statement.
The FCC said the convention centers in question were in Cincinnati, Ohio; Columbus, Ohio; Indianapolis, Indiana; Orlando, Florida; and Phoenix, Arizona.
Smart City said that until it was contacted by the FCC in October 2014, it had no idea that its practice was considered unacceptable under federal regulations.
"We have occasionally used technologies made available by major equipment manufacturers to prevent wireless devices from significantly interfering with and disrupting the operations of neighboring exhibitors on our convention floors," said Mark Haley, president of Smart City, in a statement.
"This activity resulted in significantly less than one percent of all devices being deauthenticated and these same technologies are widely used by major convention centers across the globe as well as many federal agencies," he said.
The FCC said the blocking was initiated on hotspots that broadcast above a certain predetermined power level and was not in response to any specific security threat to Smart City's network.
It said Smart City stopped the practice after learning of the FCC's investigation.
It's not the first time the FCC has taken a corporation to task for blocking personal hotspots.
In October last year, the FCC reached a similar agreement with the Marriott hotel chain to pay $600,000 for blocking personal hotspots at the Gaylord Opryland Hotel and Convention Center in Nashville. There, the hotel was charging customers and exhibitors from $250 to $1,000 per device to access Marriott's Wi-Fi network.