Minneapolis Users Charged for Free Wi-Fi

Published November 17, 2010

Wi-fi users in Minneapolis, Minnesota received some bill shock last summer when they got invoices for the city’s ostensibly free municipal service.

US Internet (USI), the provider of the Minneapolis Internet and hosting services, required users to verify their identities with a credit card. The company claims the invoices were a mistake, no credit card charges were made, and the problem was promptly rectified.

Travis Carter, USI vice president of technology, explained: ” Wi-fi users that signed up to use the free wi-fi service in the city of Minneapolis were not charged. They where mis-sent a statement that said they would be charged. However, we caught the issue quickly and sent a notice to them informing them to ignore the statement as we had resolved the issue.”

Carter said USI modified the process and software so the problem won’t happen again. He stated no monies were collected.

Predictable Problems

Esme Vos, founder of MuniWireless.com and a proponent of municipal wi-fi projects, stated on her Web site USI’s credit card policy dangerously infringed on consumer privacy rights. According to Vos, USI “needlessly collected sensitive information and discriminates against people without credit cards (young people, the poor). Furthermore, by collecting credit card information unnecessarily, US Internet makes itself a juicy target for hackers.”

Jim Lakely, co-director of the Center on the Digital Economy at The Heartland Institute, agrees with Vos’ assessment. “So-called ‘free’ municipal wi-fi services are rife with problems, but this is a new one—though it could have been predicted,” he said.

“Muni wi-fi schemes provide exclusive, often long-term contracts to a single provider,” Lakely continued. “And that monopoly power can be abused or, as seems apparent in this case, lead to a careless blunder.

“The key element in either market abuse or blunders is the lack of free-market competition to keep businesses on their toes and doing their best to serve their consumers,” he added.

‘Did Everything We Could’

Lakely says most other market-based wi-fi services, such as in coffee shops or airports, do not require credit cards if provided for free. “And if they do require a credit card, it’s clear that the consumer is paying a nominal fee to go online for a limited amount of time. No truly ‘free’ Wi-Fi system I’ve ever seen required credit cards for ‘verification’ and insisted federal law mandates it. So the whole story stinks a little,” he said.

“People are free to call our customer service center to file a complaint,” said Carter. “I feel we did everything we could have in this situation. We responded ASAP to the issue, spoke to each person that called our customer service center, responded to the media to explain what happened.”

Carter continued with his own advice: “What I choose to do with online sites and services that require a credit card number and are not going to charge me is: I have a card with a $100 credit limit; this limits my personal exposure” he said.

“I know this could have been an interesting story if we did in fact charge users or gave out credit card info or password information. In fact none of these really happened,” he said.

‘Complaining to Wrong Party’

Vos blames US Internet for the problems. “I advise people to boycott the Minneapolis network until they rescind this policy and advise cities not to work with US Internet,” she wrote.

Lakely, however, argues USI is taking more than its fair share of the blame for the snafu. “The people complaining about US Internet are actually complaining to the wrong party,” he said.

“The ire should be directed toward the city, which set up a system ripe for abuse of customers or incompetent delivery. If the city didn’t crowd out market competition in wi-fi hotspot service, consumers could use their wallets to express their displeasure toward US Internet, quickly and decisively,” Lakely concluded.

Tabassum Rahmani ([email protected]) writes from Dublin, California.