Last year, Marriott paid $600,000 to the Federal Communications Commission (FCC) to settle a complaint that it had blocked customers’ wireless modems and hotspots, forcing them to pay for in-house internet access. Now Hilton is facing some of the same charges. The FCC started receiving complaints in August 2014 that Hilton was charging customers $500 to access the hotel’s wireless service in order to use their own Wi-Fi hot spots. These charges have not yet been proven, but Hilton has been fined $25,000 this week for obstructing the FCC’s inquiries into the matter. Hilton has withheld documents pertaining to their Wi-Fi management practices for over a year, leading to this fine. Hilton denies the claims.
The Communications Act put in place by the FCC prohibits companies from maliciously blocking Wi-Fi communications. Marriott tried to lobby against this law after they were caught doing just that. They wanted to be able to interfere with their guests’ personal connections. Widespread disapproval of the idea caused Marriott to back down with their attempts.
This issue highlights how government regulations affect the way in which companies can do business. Here the government is protecting the rights of the people by not allowing firms to restrict Wi-Fi connections. However, a bigger issue is how the hotels are treating their customers. Customers are one of the largest stakeholder a company has, especially for a hotel chain. Their purpose is to provide for the customer. The fact that these hotels want to restrict customers’ wireless access, making them unhappy is a little surprising. Without the customers, the hotels do not have business. It is one thing to offer Wi-Fi for a certain price, but it is another to force it upon customers
that have another means of connection. The hotels should be more focused on providing something customers want to buy, rather than forcing them to buy something they already have.
Source: The Economist