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There is nothing related to WiFi in this system. The hotel is running the traffic through a transparent proxy which is performing MITM "attacks" to disable ads from providers and show their own ads.

It is icky for all sorts of reasons. I suppose an individual website could consider it theft of ad revenue, and an end-user could consider their privacy invaded.

Now if these MITM attacks became a bit more clever, it would be very hard to catch: rather than what they are doing now (and making everyone aware of the fact that they MITM), they could as easily change the Google AdSense Client ID's, or the Doubleclick publisher ID's etc. The creatives would still be perfectly integrated on the page, and it would take a lot of luck for someone to find that out.

transparent proxy?

no, they just need to intercept all the port 80 traffic.

Intercepting port 80 traffic is exactly what a transparent proxy does. http://en.wikipedia.org/wiki/Proxy_server#Transparent_proxy

They call it transparent because the client does not need to support using a proxy server or even be aware that it is happening.

Transparent proxies are common at corporations that filter web browsing. It is harder to circumvent than DNS blocking.

I suppose that it is no longer a transparent proxy once it starts modifying the requests or responses. But even transparent proxies generally serve an error message in some cases, like when a domain name doesn't exist or a server does not respond on port 80. So they are rarely, if ever, fully transparent.

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