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It's a unsecure WiFi router. Technicaly, it's a theft of his internet access made possible by his bad knowledge of how to make it secure. Juridically, it would be hard for him to press charges as it's hard to find evidence.
I suggest following: find your neighbour and propose that you share the charge. If he gives OK, secure his router by WPA PSK as well.
That way, you'll be able to get internet access for half a price in legal way and your neighbour will pay less and have more secure network to boot. Win win situation.
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Thank you for your time,
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