They are all signing special deals for this kind of WiFi broadcasting. Especially hotels. Several years ago I was an intern for a company that provided that specific service to hotels. Its a totally different infrastructure and the hotel is paying for all the usage from those who stay. ISPs is aware of it.

The private owner filed a lawsuit because someone else stole his private connection - you can actually build a huge case on it.

Best,

Well, he admitted to using it. There goes my next point, how do they know that he was realing using the bandwidth from that AP? But he admitted to it so, his grave.