Dec. 13, 2006 -- The Federal Communications Commission recently released an order in response to a petition for declaratory ruling filed by Continental Airlines that may be of interest to anyone that owns, leases or rents commercial or residential property. Continental Airlines had asked the FCC to preempt the Massachusetts Port Authority from shutting down Continental's WiFi network in its frequent flier lounge. MassPort had contracted with a vendor for WiFi services throughout the airport, and informed Continental that it was in breach of its airport lease which prohibited private WiFi networks. MassPort raised various arguments in opposition to Continental's petition, including the potential for interference that Continental's WiFi hub could cause to the larger airport network. Perhaps more to the point, MassPort shared revenue with its exclusive vendor arrangement; that arrangement would obviously be at risk if airport tenants opted to install their own WiFi networks.

On virtually all legal and factual points the FCC sided with Continental. The FCC reminded everyone that WiFi is an unlicensed service; hence, in actuality no WiFi operator is entitled to protection against harmful interference from other WiFi operations. And, the FCC cited longstanding rules and statutory authorities that allow tenants, under certain circumstances, to install and operate their own small antennas for certain categories of service. Those rules originally applied to video services (such as satellite TV antennas); by this decision, the FCC for the first time said that WiFi hubs/antennas are also covered under its rules. Consequently, notwithstanding contract terms to the contrary, the FCC has ruled that tenants are allowed to
install their own WiFi networks within their own leased space. By comparison, the FCC's rules would not apply if someone were to install a WiFi booth in the hallways of an airport. Continental's rights derived from the fact that it was a rent-paying tenant, and its WiFi hub was confined within its leased lounge space. The significance of this ruling extends well beyond airlines and airports. The ruling will certainly apply to all public and quasi-public spaces such as convention centers, sporting arena/stadiums, shopping malls, multiple tenant commercial and residential buildings, train and bus stations. Continental presumably didn't pursue this issue for several years only to prove a point; WiFi subscription fees, and the marketing potential of tailored WiFi offerings, can amount to serious dollars for landlords and tenants. In the coming months, landlords and tenants are likely to inspect the fine print in their lease agreements to assess the impact of the FCC's decision to expand tenants' rights with respect to privately installed and maintained WiFi networks.