T-Mobile Sues Starbucks over Free Wi-Fi
June 09, 2008 | by Nick Mokey
Although T-Mobile will soon bow out as Starbucks' Wi-Fi provider, it claims that in the meantime, the coffee house is giving away its service for free without compensation.
Loyal Starbucks customers may have been delighted to hear that the coffee chain was switching from T-Mobile to AT&T for its Wi-Fi service – and that they would be getting two free hours of Wi-Fi a day as a result – but T-Mobile was understandably not nearly as pleased with the arrangement. In fact, the company has filed suit against Starbucks over the free Wi-Fi deal, alleging it violates existing contracts. The specifics of the suit stem from the nitty gritty details of the contract that Starbucks entered into when it began transitioning in-store Wi-Fi service from T-Mobile to AT&T. In a copy of the lawsuit posted by Gigaom, T-Mobile claims that the papers give it exclusive rights to peddle Wi-Fi in all Starbucks locations until they transition to AT&T, and at the moment, only two stores, one in Bakersfield Calif. and one in San Antonio, Texas, have actually transitioned fully to AT&T’s equipment. The remaining stores, it alleges, are basically giving away its service for free and without permission. “Since T-mobile provides the resources and equipment to support Wi-Fi service in non-transitioned stores, it is T-Mobile alone that is bearing the cost and burden associated with this “free” Wi-Fi offer,” T-Mobile writes in the lawsuit. The company is seeking an immediate injunction to prevent the Starbucks deal from continuing, as well as compensatory damages. Starbucks has yet to publicly comment on the suit, and despite AT&T’s involvement in the free Wi-Fi promotion, its contractual relation to T-Mobile has kept it free and clear of the lawsuit.
Post Your Comment...Comments
Stanley on Jun 9th, 2008 at 10:41 AM:
No one I know was paying for the T-Mobile WiFi access at Starbucks. It's a joke, every other place offers free WiFi, there is no reason to pay whatsoever.
Matt on Jun 9th, 2008 at 10:49 AM:
I think Starbucks will just offer T-Mobile free coffee for the inconvenience.
Rick on Jun 9th, 2008 at 1:28 PM:
Way to go T-Mobile. While you should be able to sell your service, it was the high prices you set that stopped most Starbucks customers from using it.
I think that most people are going to view your lawsuit as a dumb thing. You are going to brand your company as a poor loser.
I was traveling the other day, and just for fun fired up by laptop at LAX. I saw your WIFI hotspot, but thought the price was too high for a few minutes of use to check my email and shut down. As you know many airports are now offering the service for free to travelers.
smokeonit on Jun 9th, 2008 at 1:44 PM:
there's actually a monthly flat rate for tmobile wifi in the US and every other country tmobile offers wifi, like germany... in germany the flat costs â€15/month and in the US i think it's $20 or so... since tmobile offers thousands of hotspots the flat price is actually quite good, but the hourly or daily prices are out of touch with reality...
what att does with its wifi hotspots, tmobile is doing in gemany, they boundle the iphone with a flat for the wifi hotspots... if tmobile would have gotten the iphone deal in the US it would have made sense to continue the starbucks deal... but since there less non iphone users that actually use the internet regularly tmobile is on the losing end in the US... the $$$ is in the iphone deal, not notebook or other smartphones than the iphone...
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Jacques Fu on Jun 9th, 2008 at 9:09 AM:
Perhaps T-mobile has gone a little far to sue Starbucks, but then again, I doubt Starbucks would've complied with the request, or even offered to pay T-mobile for the wireless services until the transition unless T-mobile did something this drastic.
T-mobile should have seen this coming from a mile away, and if they were smart, they would have worked with Starbucks to offer the free service. Now they are losing a big client, and access to a huge customer base.
Jacques
http://www.whitecollardragon.com