The Federal Communications Commission recently gave business convention holders a reason to celebrate--but it also caused a major headache for the hotel industry.
Back in Janurary, the FCC made headlines for fining Marriott $600,000 for blocking Wi-Fi hot spots, citing the Communications Act, which prohibits interference with "authorized radio communications," including Wi-Fi. Hotels like Marriott have blocked Wi-Fi hot spots in the past so that visitors can't set up their own network, and get out of paying hefty fees to use the hotel's Internet service. But despite six-figure FCC fines, hotel giants are still trying to force patrons to use their Wi-Fi.
According to the New York Times, the FCC is once again considering levying fines, this time against M.C. Dean, which provides Internet services at the Baltimore Convention Center, and Hilton Worldwide Holdings, for $718,000 and $25,000 each. M.C. Dean allegedly blocked Wi-Fi hot spots, while Hilton allegedly tampered with an investigation into its supposed Wi-Fi blocking.
What's at stake here is that hotels could lose an important source of revenue--as much as half a billion dollars each year, according to an NYU hospitality professor quoted in the Times story. While it pales in comparison to the $176.7 billion generated by the U.S. hotel industry in 2014, it is an easy source of revenue, especially considering the fact that it allows hotels to generate thousands or even millions of dollars in a single day. Take a look at the Wi-Fi tab for all 175,000 attendees at this year's Consumer Electronics Show--over half a million dollars--and it's easy to see why event centers are hesitant to part with this influx of cash.
But even as hotels start to offer discounts, most meeting planners still save thousands of dollars by bringing their own Wi-Fi hot spot. And with the FCC now on the consumers' side--and no indication that it's willing to back down--it appears as though for hotels, the days of generating millions of dollars from Wi-Fi fees may be coming to an end.