Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has made not being evil an essential part of its identity literally including the phrase, "You can make money without doing evil" in its corporate philosophy. Microsoft (NASDAQ:MSFT) may not be quite as direct in communicating its intentions, but founder Bill Gates, who remains a board member and one of the company's largest shareholders, has a pretty impressive record as a philanthropist.
In general, both companies have, in their own ways, followed a do-no-evil mantra, which makes it not so surprising that the two tech leaders have come out against a petition to the Federal Communications Commission from the American Hospitality & Lodging Association, which would allow hotels to block guests from using personal Wi-Fi hotspots. This practice, which is currently illegal, led to the FCC fining Marriott (NASDAQ:MAR) $600,000 last October for blocking personal Wi-Fi hotspots at its Gaylord Opryland Hotel and Convention Center.
Both Google and Microsoft, which are intense competitors, filed documents with the FCC arguing that the current rules are fine and there is no need to hold new hearings on the issue. Google's filing summed up the opinion of both nicely:
The Communications Act and Commission precedent make clear that the network-blocking practices at issue here -- which the Enforcement Bureau just recently found illegal -- violate Section 333. There is no need for a new proceeding to confirm this. Indeed, while Google recognizes the importance of leaving operators flexibility to manage their own networks, this does not include intentionally blocking access to other Commission-authorized networks, particularly where the purpose or effect of that interference is to drive traffic to the interfering operator's own network (often for a fee). Congress directed the Commission to prohibit such willful interference, and the Commission has consistently done so.
In effect, Microsoft and Google are calling out the hotel industry and stating bluntly that they don't buy the idea that blocking Wi-Fi hotspots somehow protects consumers. Having two companies as large and well-known as Google and Microsoft bring attention to this issue makes it hard for the FCC to change its rules without anyone knowing. Ultimately, that's good for consumers who won't be forced to buy pricey hotel Wi-Fi if they already have their own personal access.
What the AH&LA is arguing
The trade association wants the FCC to provide clarification to its Section 333 rules, which currently prohibit any sort of signal blocking. Rather than directly saying it wants hotels to be able to stop guests from accessing personal Wi-Fi devices, the AH&LA filing asks that "the Commission declare that the operator of a Wi-Fi network does not violate Section 333 by using FCC-authorized equipment to monitor and mitigate threats to the security and reliability of its network, even when doing so may result in "interference" to a Part 15 device being operated by a guest on its property."
Basically, the petition, which specifically rules out the use of so-called signal jammers, wants FCC permission to use legal devices to monitor security threats to its networks. That sounds benign enough, but what it's actually seeking is the OK to use those devices that will then block access to personal Wi-Fi under the guise of them being security risks and potentially slowing down the hotel's own Wi-Fi offering. The petition explains the AH&LA stand:
Any access point can be used to launch an attack against an operator's network or threaten its guests' privacy (for example, by attempting to obtain guests' credit card or other personal information). Likewise, multiple Wi-Fi access points operating in a meeting room or on a convention floor of a hotel can adversely affect the performance of the hotel's Wi-Fi network. If a hotel is powerless to address such activities to ensure the security and reliability of its Wi-Fi network on its premises, both the hotel and its guests would suffer.
It's not about profit, the AH&LA argues, it's about keeping people safe, and alleviating the potential suffering of its guests.
Microsoft and Google, as you might imagine, don't see it the same way.
What the tech giants are saying
Microsoft made it clear in its filing that it does not buy the AH&LA's reasoning.
The Wi-Fi network "management" for which Petitioners seek authorization would be a conscious and deliberate act that exploits Wi-Fi operating protocols to interfere with authorized radio communications and would therefore be willful, as proscribed by the Act.
Google's document also blatantly states that the search giant sees the AH&LA's petition as a way to skirt a clear law that protects personal Wi-Fi hotspots. It specifically cites network management equipment at issue in the petition, which would give hotels "the capability to mitigate access points" by sending de-authentication packets to hotel guest Wi-Fi devices.
De-authentication is a fancy way to say "turn off," and Google points that out. "In other words, operators of such network management devices "knowingly transmit" deceptive signals to render the guest device unusable," it wrote.
The FCC needs to stand strong
While it's hard to fault the AH&LA for trying, let's be clear what its intent is, here. It's not about security or guest experience, it's about protecting its lucrative ability to sell Wi-Fi -- often at inflated prices. That was a great business before personal hotspots became common, but technology has eliminated what was once a monopoly. Asking the FCC to offer a backdoor to ban personal Wi-Fi hotspots would be like cable companies asking the FCC to make delivering video over the Internet illegal.
The cat has already starting working its way out of the bag, and it's not the place of the FCC to put it back in. Microsoft and Google are both just standing up for consumers in the face of an artificial attempt to create a revenue opportunity for hotels.
Daniel Kline owns shares of Microsoft. He does not use a personal Wi-Fi hotspot but would like to. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.