T-Mobile Sues Starbucks For Over Eager Switch To Free WiFi

from the that-wasn't-what-we-bargained-for... dept

Mon, Jun 9th 2008 1:39am — Mike Masnick

Back in February, Starbucks surprised an awful lot of people by signing up to use AT&T's WiFi offering, ending the exclusive deal it had for many, many years with T-Mobile (and Mobilestar before T-Mobile purchased that company). Part of the AT&T deal was that it would offer some amount of free WiFi -- something T-Mobile/Starbucks never did. There was some early confusion about the deal concerning whether T-Mobile would continue offering service and how the two services would overlap. It turns out that it wasn't just confusing to us reading about it -- it was confusing to T-Mobile as well.

T-Mobile has now sued Starbucks over the transition, saying that the company has gone well beyond what the two companies had agreed to. The original plan was that T-Mobile would gradually transition the network to AT&T, and the companies would work together to make sure things worked well for customers of each company. However, just recently, Starbucks pushed forward with the plan to offer some number of "free" WiFi hours to AT&T customers -- much to the annoyance of T-Mobile, who says most of the WiFi equipment in use is still T-Mobile's, and the company isn't getting paid at all for the free hours (an interesting question could be whether or not AT&T is getting paid for that usage).

Basically, the infrastructure transition has barely begun, and Starbucks is already acting as though it's complete, shifting over to the business model provided by AT&T, without having that work within the parameters of T-Mobile's model. While the legal result will almost certainly come down to contractual terms, the real issue may be that this suggests the promised "smooth transition" from T-Mobile to AT&T may not be very smooth at all. T-Mobile is going to have less and less incentive to make sure that the network really works all that well, especially if it feels that it's being cheated out of money for the use of its network.

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Filed Under: contracts, wifi
Companies: at&t, starbucks, t-mobile

34 Comments

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phil S, 9 Jun 2008 @ 3:22am

Get with the times
Come S'bucks. Get with the times --- (Panera Bread, etc)....offer free wi-fi. You're sales are down...this would certainly bring more customers
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phil S, 9 Jun 2008 @ 3:23am

Get with the times
Come S'bucks. Get with the times --- (Panera Bread, etc)....offer free wi-fi. You're sales are down...this would certainly bring more customers
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Jeremy, 9 Jun 2008 @ 4:33am

i think out of the 10 different coffee places i know of around here starbucks is the only one charging for WiFi
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joe, 9 Jun 2008 @ 4:36am

it's called karma
Oh what irony. T-Mobile is suing Starbucks claiming violation of a contract for Wireless service. Those corporate snakes deserve each other.

Three years ago the pair of them screwed me out of $10 for a day pass that didn't work because the router went down seconds after I paid. No refund. Not even a credit.

As a result, I've not spent another penny on either of them.

I estimate that the money I have have not spent at Starbucks is about $300. And, I've paid roughly $1,900 to another carrier for their wireless card service.
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Bignumone, 9 Jun 2008 @ 4:53am

Starbucks seems to be trying
I think Starbucks is trying to become better. But I am not sure why they fought free (or even low cost) wifi for so long. And to become tied to one carrier seems really backward in today's business environment.
It sounds to me like T-Mobile had it good for a very long time and is now bitter it is losing that position. And the idea that T-Mobile would not do the best they could for Starbucks sounds like bridge burning to me.
Finally, I heard that the AT&T "free" wifi is not that great of a deal either, just better than T-Mobile "pay as you play".
Keep trying, Starbucks. You may get it right if you do.
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Ur Drunk Uncle, 9 Jun 2008 @ 4:54am

Re: Get with the times
So True. McDonalds offers free wifi but they can't?
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IT Man, 9 Jun 2008 @ 5:00am

McDonald's wifi
Ummm...the last time I checked, McD's didn't offer free wifi. In fact, many of the stores are on the same AT&T wifi as Starbuck's is starting to offer.
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Adrian, 9 Jun 2008 @ 5:08am

Re: Re: Get with the times
Not true. McDonald's is a franchise. It depends on whether that particular store wants to offer wifi, not McDonalds itself. McDonalds couldn't care less unless you don't pay their royalty.
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Anonymous Coward, 9 Jun 2008 @ 5:12am

Re: McDonald's wifi
They've been offering it for quite a while now.

http://www.mcdonalds.com/wireless.html
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Anonymous Coward, 9 Jun 2008 @ 5:15am

As a Starbucks employee I understand how badly we need free wifi and we have a contract with T-mobile and the company was waiting until the contract ran out but apparently that is not good enough for patrons or the provider. The situation will be solved so please rest assured that you will get something for free since that seems to be what you are most concerned about.
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..., 9 Jun 2008 @ 5:17am

Re: McDonald's wifi
Pretty sure it depends on the McD's but some do offer wifi for free.
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Anonymous Coward, 9 Jun 2008 @ 5:39am

Re:
yes, free is all I care about when it comes to paying 5.00 for a urine sample of coffee that generally comes out tasting burned and dealing with snobby coffee shop employees. Unless one of my clients absolutely requires we go to a Starschmucks I avoid it like the plague rat infested hole of snootishness it is.
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Anonymous Coward, 9 Jun 2008 @ 6:00am

Re:
> you will get something free since that seems to be what you are most concerned about.

That sounds like a real backwards strategy. Will we learn more later today at WWDC? Is Apple involved?
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Anonymous Coward, 9 Jun 2008 @ 6:11am

problem with outsourcing
I realize they are a coffee company and not a technology company. But WIFI in all of their stores is something they will need for the foreseeable future. This legal mess is their own fault for not bringing it in house to begin with.
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ricky, 9 Jun 2008 @ 6:31am

wifi
who gives a shit. non issue. wait, why am I commenting on it?
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JT, 9 Jun 2008 @ 6:31am

Re: Re:
Your ex must work at starbux, eh? She really did a number on you. Just let it out, man...just let it out.
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chris (profile), 9 Jun 2008 @ 6:43am

starbucks has to get in bed with AT&T
at&t is the new mac fanboi telco of choice since they sell the jesus phone exclusively.

since starbucks practically frisks you at the door for a macbook, it only makes sense that you would switch to the provider that most of your customers have already switched to.
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Chris, 9 Jun 2008 @ 6:54am

Re: it's called karma
Wow,
Usually Starbucks is very good about making a customer happy. When I worked for them you would have at least gotten a couple of drink coupons to compensate you. Could have been the particular store you were at as well.
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Anon, 9 Jun 2008 @ 8:03am

If I provide free wifi for my neighbors and so many businesses do as well, is this helping or hurting starbucks?

All stores have a broadband data connection right?
Wireless AP's are cheaper than dirt right?

SO... give the customer free service all the time as a value added bonus.. it costs you nothing and the customer appreciates it.
How much do you spend on 'charging for wifi'? Are more and more or fewer and fewer customers willing to pay?
Is there more in pocket wifi out there than ever before?
DUH!!
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Ted, 9 Jun 2008 @ 8:11am

Noah/Starbucks
It's amusing to us to see all the laptops outside of the Noah's Bagels (free wifi) with Starbucks cups.
Even Subway provides free wifi.
About time Starbucks got with the program.
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Phil, 9 Jun 2008 @ 8:26am

It's all business and Starbucks is hurting!
Free WiFi is available at many places except for Starbucks. Paying for WiFi isn't necessary anymore, period! I used to go to Starbucks as an office away from home but now Panera is my backup. The coffee is just as good plus the food is great.

Starbucks is making the change because they know they need to for the sake of competition. Starbucks isn't that Holy and Green company it used to be. It's just another fighter looking for the Holy Dollar. Anyone working for Starbucks who thinks they are working for some altruistic company needs to step out of their hemp underwear and start reading corporate reports.
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GHynson, 9 Jun 2008 @ 8:37am

Re: Re: Re: Get with the times
I've been to Mc.D's all over this country,
And still have not seen one that had FREE WiFi.
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Anonymous Coward, 9 Jun 2008 @ 8:44am

Re: Re: Re: Re: Get with the times
There's about 80 McDs within 20 miles of me, and 2 out of 3 have wireless. YMMV

Check http://www.mcdonalds.com/wireless.html
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BigDogRMF (profile), 9 Jun 2008 @ 8:51am

StarSchmucks
When I stepped into a StarSchmucks a few years ago and saw that I had to pay for WiFi, it was the last straw. Mediocre, over-priced coffee served with a side order of holier-than-thou... I've never been back into one. Never.

Folks... wherever you get your coffee, please use local 'Mom & Pop' vendors... act (and keep your $$$'s) local. They'll really appreciate it.
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Anonymous Coward, 9 Jun 2008 @ 9:29am

Re: It's all business and Starbucks is hurting!
Funny... i think the same thing every time I fly into Atlanta and try to use the wifi there and get a pay to play page. This thing about charging for wifi is retarded. I'm going to get for free, or I'm going to hack your router and make it free. It is either my way the easy way, or my way and I make you lose projected revenue. and If I'm gonna crack your router, I'm going to crack anything else I can get to because you are too dumb to get with the program.
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Dan, 9 Jun 2008 @ 9:54am

Re: Get with the times
Screw their profits. Its exactly these types of dirty business practices that hinder its industry position.

Watch their profits the month in which a court sides against them.
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Dan, 9 Jun 2008 @ 10:02am

Re:
... it costs you nothing....

???

What f*&^ing planet do you live on moron?? You pay $4.50 for a $0.50 cup of coffee... oh, wait, but the WIFI is FREE!

I bet you whine paying $4.00 for a gallon of gas while purchasing a pint of bottled water for $2.
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Nasch, 9 Jun 2008 @ 10:02am

Re: Re: It's all business and Starbucks is hurting!
I'm going to get for free, or I'm going to hack your router and make it free.

Is this a common sentiment, or just this one guy? Or is he just making stuff up and I've been trolled?
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Accountant, 9 Jun 2008 @ 11:01am

Bikini Baristas
I stop at the local Bikini Baristas, yep, hot babes in bikini's year round serving drive-through coffee. Good Mocha too... who cares about wifi?
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bt1980, 9 Jun 2008 @ 11:09am

Typo/Grammaticall error in article?
This sentence isn't making sense to me. Anybody else?

While the legal result will almost certainly come down to contractual terms, the real issue may be that this suggestions the promised "smooth transition" from T-Mobile to AT&T may not be very smooth at all.
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home brew, 9 Jun 2008 @ 11:40am

Coffee master
I brew my own at home and work with a 10 dollar espresso pot and my own frother. Tastes much better and I don't have to worry about some numbnut spelling my name wrong on the cup or even forgetting to make my coffee(it happened a few times lol)!
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Ulle, 9 Jun 2008 @ 11:41am

The local McDonalds here has the pay wifi but the burgerking across the street has free wifi with a strong enough signal that we can use it sitting in the McDonalds, doesn't make much sense.
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chris (profile), 11 Jun 2008 @ 7:50am

Re: Re: Re: It's all business and Starbucks is hurting!
Is this a common sentiment, or just this one guy? Or is he just making stuff up and I've been trolled?

it's easier under a number of circumstances to get free access without touching the router:
http://thomer.com/howtos/nstx.html
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BigDogRMF (profile), 19 Aug 2008 @ 3:09pm

Re: Bikini Baristas
good call.

W00f W00f!
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