T-Mobile Suing Starbucks

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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T-Mobile Suing Starbucks

T-Mobile is already not thrilled AT&T will replace them as the service provider of choice in Starbucks stores, now the GSM-based service provider who was early to embrace WiFi is losing revenue due to the new AT&T/Starbucks promotion of free WiFi in its stores.

While the news came out around February 11th that AT&T and Starbucks would provide free WiFi service, according to these court documents T-Mobile learned of this arrangement on or around March 30th.

Here are the salient points from this lawsuit:

  • In early 2008, Starbucks, AT&T and T-Mobile negotiated some agreements allowing a structured and seamless transition allowing AT&T to replace T-Mobile as the WiFi provider in Starbucks stores.
  • During the transition period, T-Mobile and AT&T would each promote the other brand via web pages which are displayed when a user logs onto the wireless network.
  • In addition, this page would allow customers to be authenticated by an existing subscription with either service provider.
  • AT&T and T-Mobile would not pay each other for using one another's networks.
  • Starbucks rolled out a promotional plan allowing its customers using a Starbucks card to register the card at starbucks.com and at this point the customers are directed to an AT&T page.
  • Since every US market is covered by T-Mobile except for Bakersfield, CA and San Antonio, TX, T-Mobile loses the opportunity to be marketed in front of these customers in other markets.
  • In addition, these cards are available to everyone, not just AT&T customers.
  • The agreement stipulates only AT&T customers are to have this right.
There is more but you get the idea... The point is if you have a T-Mobile account today, why not cancel it and use these cards instead to ensure you have access to the internet for free.

Based on the documents it is apparently T-Mobile thinks that Starbucks and the relationship they have with the behemoth of a coffee house is important to their success. Om Malik finds it funny that a coffehouse is a key pawn between two telecoms. He has a point. Then again, the branding associated with this agreement must really help T-Mobile.

Rob Adler points out it is interesting that T-Mobile did not sue AT&T but then again, AT&T is a more formidable legal opponent and suing AT&T may still be an option.

If there is a takeaway it is that the importance of broadband access -- especially wireless broadband is coming into focus. Although the outcome of this case is probably irrelevant to people who frequent the coffeehouses, what is certain is that service providers are taking their ability to provide wireless access to customers very seriously.


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