I think the yellow light means that the console's Streetpass is checking for data/updates/etc. I'm fairly sure that's normal, but mine doesn't blink so it might be something different?
If the thing is off, it's SpotPass, you can set it up however you like. (2 hours, 4...whatever, I think you can even shut it off for whatever reason) But yeah, yellow means SpotPass, blinking yellow means it's downloading.
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Topic: blinking yellow light
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