T-Mobile files suit against Starbucks over WiFi transition to AT&T

That deal AT&T whipped out of their hats to take over T-Mobile's position as sole provider of WiFi at Starbucks? Turns out T-Mo is pissed about how the transition has gone down, and has filed suit against the buxx alleging collusion with AT&T, despite their supposedly exclusive agreement. Apparently T-Mo was basically allowed to run out its time serving and promoting WiFi service while Starbucks shops slowly converted over to AT&T. But T-Mo feels like it's basically been pushed out (you don't say!), claiming only two markets (San Antonio and Bakersfield) have actually legitimately transitioned to AT&T -- far too little for Starbucks to come off like T-Mo service is done and over. We don't know how much the suit's worth in damages, but it sounds like they'll be after a lot more cash than their magenta-related filings have brought in.

[Tim @ Jun 6th 2008 10:45PM]

thats pretty ridiculous.
On the plus side, I'm not clak, iEye, or Steffen Jobs

[Rafer @ Jun 6th 2008 10:53PM]

MAGENTAAAAAAAAAA IS MINE!!!!!!!!!!!!!!!!!!!!!!!!

[peekinde @ Jun 6th 2008 11:10PM]

clak: pro @ sitting in front of the computer waiting for someone to say something bad about him and responding super fast

[Abuzar @ Jun 6th 2008 11:46PM]

Hey clak, SHUT UP

[Bunson @ Jun 7th 2008 12:04AM]

I believe the term 'lawlocaust' fits this conversation just perfect.

[john @ Jun 6th 2008 10:45PM]

You want to know what I don't get about this? (and, yeah, I'm a T-Mo fan, by now every regular reader should know that ... but this would be true if we were talking about AT&T vs Verizon, my two least favorite carriers)


Why would Starbucks put themselves in the position of getting LESS revenue by taking on a second exclusive deal? The carriers are absolutely going to want more coverage. Sure, what they really want is exclusive coverage, but I am willing to bet the income from AT&T and T-Mo together would be greater than the exclusive income from just one of them.

IMO: Starbucks is just being stupid.

[M Burke @ Jun 6th 2008 11:59PM]

because next to no one was taking advantage of the t-mobile connection in the 'bucks as it was. I'm not going to pony up $5 for the first few minutes of net connectivity, besides, the juice bar next-door has free wireless.

[Jimmy Jones @ Jun 7th 2008 3:02AM]

I agree with you....Starbucks is just a coffee shop that hasn't really gotten a nice competitor up its sleeves.... when it does, I'm pretty sure all that Apple love making will chill down for a bit and the revenue loss will kick in then...

[Bkzbeatboxxx @ Jun 8th 2008 12:54PM]

KUDOS dude, seriously I couldn't have said it better myself.
I'm a Barista in NYC and there is ATT service on TMO's routers. It's truly messed up on ATT and SBUX's part. SBUX might be the one that loses out the most

[vandy1997 @ Jun 6th 2008 11:22PM]

Well, considering that Starbucks sells iTunes cards and promotes iTunes and Starbucks is integrated into the iPhone, it seems like Apple had a bit to do with this as well. Maybe Starbucks gets a portion of the revenue earned by Apple from songs that are downloaded at Starbucks stores. Since AT&T has a five-year exclusive deal for the iPhone, it seems like Apple required that AT&T be the sole distributor of WiFi service for the iPhone. Maybe the deal from Apple and AT&T was sweet enough that the T-Mobile deal was no longer acceptable. AT&T just had more to offer - plain and simple. And maybe they did research and determined that people who purchase iPhones are more willing to pay an exorbitant amount of money for a cup of coffee. And that's where Starbucks makes its money - not from providing WiFi service. You have to follow the cash to determine why certain decisions are made. And T-Mobile if part of Deutsche Telekom - they're not a tiny company that will lose tons of money due to the fact that they will not be providing WiFi services at Starbucks. Supposedly AT&T is going to provide the WiFi service to its smartphone subscribers for free - so they aren't making any extra money off of this - except for the fact that some T-Mobile subscribers will move over to AT&T. Come on - wake up!

[vandy1997 @ Jun 6th 2008 11:24PM]

I was going to say wake up ... and smell the coffee!!! It's all about the weak dollar. Haha!!!

[BigD145 @ Jun 7th 2008 12:02AM]

A company suing another company? This can end only one way: price hikes and job cuts.

[Abuzar @ Jun 7th 2008 12:11AM]

Why do people need to bring their laptops to starbucks? I'm just wondering what important work they get done in a coffee shop which they couldn't get done anywhere else.

Ironically enough, all my friends with Macs do this. All they do is get a coffee, go outside and sit at the little tables and check their email lol.

[Blacksheep @ Jun 7th 2008 12:20AM]

I always wondered that as well. It's like "hey look I'm writing/using the internet in public on my Mac, I'm awesome and Indie, but I act like I don't care about those things because I'm Indie."

Figures they'd switch to AT&T, all the douchebags with iPhones need to be seen in public using said iPhones, so of course their favorite hangout needs to be compatible with it.

[Chris @ Jun 7th 2008 12:22AM]

It's not for the laptop packing "I like to make people think I'm important" hippies anymore, it's for their iPhone customers to connect to the iTunes/Iphone apps store. They could give a crap less about the laptop guys, they get a cut of the istore action. Get your iPhone on Monday and you will understand....

[asurroca @ Jun 7th 2008 2:18AM]

I work remote and literally work out of Starbucks or other cafe at least three days a week, and what do you know, I use the Zune to block out the customer banter. There's a local coffee shop I go to that's practically an office, and I've done some good networking there.

Scoff if you want, but with all the remote workers out there, these kind of places definitely fill a growing niche. Heck, I'm surprised that half of the people here aren't freelancers working out of a coffee shop.

[Abuzar @ Jun 7th 2008 2:39AM]

I'm not trying to put you down, I'm really curious. What do you do?

[Astrostream @ Jun 7th 2008 10:36AM]

I study astrophysics. and i do most of studies in coffee shops. seriously.
So don't just brush everybody because you know a couple of people that the only thing they o is checking their emails.
At the same time I am a day trader and I do most of my trades in coffee shops.

[Phil B. @ Jun 8th 2008 9:13PM]

Guy #2: Hey, getting some writing done there buddy?

Guy #1: Yeah, setting up in public so everybody can watch me type my big
screenplay.

Guy #2: Me too. All real writers need to be seen writing otherwise what's the point, right?

Guy #1: You should totally write that down!

Guy #2: Okay, will you watch me?

[Chris @ Jun 7th 2008 12:11AM]

Looks like tmobile got their panties in a bunch for nothing. What else did they have to bring to the party???? Nothing...... Bucks wanted some of those itunes store bucks flowing their way. How was tmobile going to compete with that???

[Graham @ Jun 7th 2008 12:28AM]

Woah, so att and starbucks are gay?

[phanbouy @ Jun 7th 2008 1:49AM]

not that there's anything wrong with that

[Anthony H. @ Jun 7th 2008 2:50AM]

Maybe Starbucks is a girl?..

[Reader @ Jun 7th 2008 2:54AM]

He can still be surprised. It is statistically unlikely.

[flammis @ Jun 7th 2008 3:24PM]

If you're going to assigning gender to companies - the starbucks logo is a mermaid with hair covering her breasts. The original incarnation of the starbucks mermaid was considered too racy back a decade or so ago which is why we have the current, more abstracted version.

I've always thought of the AT&T logo as Deathstar-esque - but hey who's to say the Deathstar isn't feminine? Starbucks/AT&T could be lesbians!

[TJ @ Jun 7th 2008 4:28PM]

@flammies:

I think he was referring to the image at the top where there are two guys (not one in a dress) holding hands.

[Yu Gi Joe @ Jun 7th 2008 12:36AM]

They're going to sue themselves out of existence if they keep it up.

[asurroca @ Jun 7th 2008 2:19AM]

It's OK, Starbucks doesn't use magenta in their color palette; they've got nothing to worry about.

[wasabi @ Jun 7th 2008 2:26AM]

they're just suing everyone huh..

[Jimmy Jones @ Jun 7th 2008 3:02AM]

@ 3am EST .......i found myself liking the picture above..........the holding of the hands.... can't really vouch for the cute and coziness but it's definitely understandable how err...Mr. Magneta felt left out of the scene...

[Jimmy Jones @ Jun 7th 2008 3:02AM]

@ 3am EST .......i found myself liking the picture above..........the holding of the hands.... can't really vouch for the cute and coziness but it's definitely understandable how err...Mr. Magneta felt left out of the scene...

[gman @ Jun 7th 2008 3:12AM]

At SBUX in LA,there are both att and tmo wifi. When you go to itunes on the att wifi, itunes shows the current playing song in the store and you can buy it. pretty cool.

[Adrian Williams @ Jun 7th 2008 3:31AM]

T-Mo might be a little mad cause ATT have contracts with McDonalds and Starbucks maybe T-Mo should go after wi-fi at the Yum brands

[Wayne Schulz @ Jun 7th 2008 6:15AM]

Both Starbucks in Glastonbury CT have AT&T Wi-Fi --- and from what I read online plenty of other markets have transitioned.

Here's where I think Starbucks is going to make money. And I've thought it ever since the news first broke announcing that T-Mo was out and AT&T was in.

Unredeemed balances on Starbucks Cards.

Since this agreement requires every Wi-Fi loafer to have a Starbucks card with a balance and to be active -- Starbucks stands to reap big bucks from un-redeemed card balances.

Remember when Starbucks had that creepy policy of charging a couple bucks per month for any Starbucks card that hadn't been used in a while (this policy has since wisely been repealed)....

Gift cards are big money. Not the cards themselves, but the portion of the cards that are not redeemed.

This is Starbucks end of the deal. Unredeemed gift cards.

[J. Houk @ Jun 7th 2008 8:49AM]

You're absolutely, 100% correct. I spent a couple years working at the Bux, and came across some fact sheets from our gift card operator. It was somewhere in the realm of 30% of SBUX cards go unredeemed.

On another note, I actually agree with T-Mobile on their lawsuit this time. While I understand why SBUX did it (better service, Apple support, sick of turning people away) I also know that they had a contract for exclusive support through 2010. If I made a contract with someone, and they bailed early you better believe I'd sue them. Nothing personal, just straight business.

[z0phi3l @ Jun 7th 2008 10:41AM]

Contracts can be broken and not illegally. There was most likely a clause somewhere where it gave SBUX the right to leave if certain conditions weren't met


Don't you know this is all about who has better Lawyers/Contract writers?

[J. Houk @ Jun 7th 2008 8:53AM]

BTW, SBUX already reaps in the rewards of an unused SBUX card. The registering simply helps the shareholders cause they can track exact usage, and budget likewise.

[YYL @ Jun 7th 2008 12:12PM]

I think T-Mobile should blame themselves for sitting there idly all these years without improving their Internet speed and pricing model. When Starbucks was in the T-Mobile age, I used the service a few times, and the results were un-spectacular. Sometimes the Internet slowed to a crawl. There was even once that their payment system was down, and the payment seemed to go through but actually did not. I had to call customer service to find out, after making the payment but having trouble logging on.

And at the same time, AT&T kept expanding their presence, and offered free WiFi service to many of its consolidated customer base. I am now able to very easily log on to AT&T WiFi in Starbucks using a DSL account, for free. And the Internet speed seems to be faster too (though I never clocked it). That actually increased my motivation to go to Starbucks with my laptop.

[kirk @ Jun 7th 2008 4:41PM]

Unless you're in a Starbucks in San Antonio or Bakersfield, you're still using the old T-mobile infrastructure. Next time you log in using the ATT SSID watch in your browser just how many times it bounces back to http://service2.hotspot.t-mobile.com while getting asking for the login and accepting your password.

I noticed when I used the ATT SSID at my local Starbucks and my ATT account from having the Starbucks card that you actually see the "welcome to T-mobile hotspot" message after logging with the magenta ID like you get momentarily after logging in with a T-mobile account.

What is also strange in the markets I've used (San Diego CA and Austin TX) my iPhone gets really confused when I change SSIDs. I can be attached to the ATT SSID but T-mobile/Starbucks welcome screen will come up (and vice versa, I'll get the ATT orange login when I connected to the tmobile SSID. Only turning off wifi and turning it on again will make the iPhone happy again.

[Frankie @ Jun 8th 2008 1:17AM]

I use Starbucks to study and work. And the system was great before the TMO to ATT transition. I am a TMO user.

I could sit there and download music and surf the web and hit lexis nexus superfast with no problem. Now throughout Socal the networks are really confused. It's like there is an ATT and TMO router present BUT only the TMO portal works. I tried switching to the ATT router in Los Angeles and there was nothing to connect to.

If I was TMO I would be pissed because I called them and complained.

If ATT is going to take over, then they should get there act together and stop using TMO and burdening us TMO customers. Go play with your silly iphones and use ATT's data network. Leave TMO wifi alone.

[carlo2 @ Jun 8th 2008 5:48PM]

Hmmmm, you TOTALLY outted yourself--"Lexis"... ;oD

[bryan @ Jun 9th 2008 8:00PM]

Buy can it play Crysis, Doom. Zork, Kroz, SimCity, DOS 3.3 and Ubuntu - all at the same TIME???? I think no!!! MAGENTAAAAAAAAAA rules!!! Death to AT&T...

Oh, wait, was that over the top?

[Cell Phone Junkie @ Aug 16th 2008 4:04PM]

It depends how the contract is written. In this case the reason T-mobile is "upset" is because Starbucks went completely with AT&T in markets where AT&T is not even present. From a Starbucks standpoint it makes sense because you don't want to confuse your customers if you are a national chain. While T-mobile is upset because they're thinking, "are you kidding me, your dumping us and losing money in a lot of markets b/c no one else is there?" Also,
AT&T has allegedly begun granting users free and paid access in markets where it has not completed or even begun the equipment transition. With as much as AT&T and iTunes are linked with 6 million iPhones on the market and as much as Starbucks sells iTunes music it makes perfect sense overall.

Thanks, Cell Phone Accessories (Junkie)
http://www.anythingformycell.com