It sounds like the MacBook connection problems only happen when you have blocked the kiddo's x-box, correct?
Does removing the X-Box block allow you to connect to web and email?
If so, the problem is likely happening because of DHCP. DHCP means the router hands out IP addresses. Usually, DHCP will hand out IP addresses in the order that devices connect to the router.
For Example:
1st - 192.168.0.1 -> MacBook
2nd - 192.168.0.2 -> X-Box [BLOCKED]
Now lets say the kid reboots the router while you are away. Now the X-Box connects to wifi first and gets the first IP address. When you get home you get the second [blocked] address
For Example:
1st - 192.168.0.1 -> X-Box
2nd - 192.168.0.2 [BLOCKED]-> MacBook
Setting up your MacBook with a manual address (DHCP with manual address ) might work... but only if you chose an unused IP address in the "proper IP address range" for your router.
If the above is similar to your situation ... The solution to this depends on the make and model of your router.
My router has an option for "DHCP with reserved addresses". This will reserve and assign a specific IP address to a specific device.
Example:
192.168.0.8 -[BLOCKED] [RESERVED for X-Box] .
The "reservations" are based on a device's "MAC Address". The "MAC address" is a unique "serial number" for the for a devices WiFi or ether (MAC address is nothing to due with MAC OS.)
Another option is to set the IPs manually but this would could be a pain... There may be other options depending on the make and model of your router.
Please let us know more about your router and router setup.
It's on the exclude list because a 169.254/16 address is by definition not external to your network. A proxy server relays your requests to other networks. Proxy servers are much less common today than they used to be, but if you are using one, and you didn't have that exclusion, you could get some very strange results.
If you have the proxy enabled without exclusions, you run the risk of the proxy intercepting a request intended for a device on your network, and trying to relay it to the outside world. The possibility exists that the traffic would never reach its intended target on the local network. So the exclusion is telling the OS not to send traffic that should stay local to a proxy meant for external traffic.
I don't know of any reason why it would compromise your own computer's security either way. You can get rid of it, but I don't any advantage of doing so.
Best Answer
What is being done there is that you are bypassing any configured proxies for local computers or computers with a self-assigned IP address. This is configured by default in OS X and has nothing to do with giving your WiFi password to your neighbor.
Local Computers (Hosts) If you are not given a local DNS name by your DHCP server (your WiFi router, for example), your Mac will default to a
.localdomain. So, if you have to go to another computer on your own local network, it will bypass the proxy (if one is configured) and just connect directly. OS X is assuming all local computers are on the.localdomain.169.254/16 This is a non routable (private) self assigned IP address. You would get this IP if you don't have a DHCP server providing you one. Again, this is there to bypass any proxies you might have configured when connecting to a computer on your local network.
What is a Proxy (Server) In short, a proxy is a server that makes requests as an intermediary for other computes on the network. For example, you can have a content filter (at work) that prevents you from going to the naughty bits on the Internet. It will look at your request, analyze it, then either reject it or make the request for one. When the remote server responds, it takes the data and sends it to you.