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AT&T The Almighty Buck The Courts Wireless Networking

T-Mobile Sues Starbucks Over Free Wi-Fi Deal 142

Posted by Soulskill
from the hot-spot-flare-up dept.
Glenn Fleishman writes "T-Mobile sent me the text of a lawsuit they filed yesterday against Starbucks. The telecom firm alleges that Starbucks didn't involve it in any discussions to launch their free loyalty program Wi-Fi service this week with AT&T. AT&T is gradually taking over hot-spot operation from T-Mobile, market by market over the course of 2008. T-Mobile told me Starbucks is essentially giving away something that isn't theirs. T-Mobile has sued to halt the two-hours-a-day of free service, and is asking for money to cover losses. This might sound like sour grapes, but T-Mobile still operates most of the network, and says that the terms to which they agreed with Starbucks and AT&T for the transition and with AT&T for bilateral roaming don't cover this situation at all. Maybe free access in exchange for buying a cup of joe every 30 days was too good to be true (this soon)."
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T-Mobile Sues Starbucks Over Free Wi-Fi Deal

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  • Hmmm (Score:5, Interesting)

    by Thyamine (531612) <thyamineNO@SPAMofdragons.com> on Sunday June 08, 2008 @09:02AM (#23699797) Homepage Journal
    Maybe I don't understand, but if Starbucks is already paying them for having the wifi service, why can't Starbucks give it away/charge for it as they like? Did the original agreement require Starbucks to charge each user on behalf of TMobile or something?
    • Re: (Score:3, Informative)

      by kesuki (321456)
      the problem, is that starbucks rolled out this wifi thing in 2002, and instead of putting in highspeed internet in each and every starbucks, they put in a wi-fi access point that relayed the data over a cellular network.

      much cheaper than paying $40 a month per location for dsl/cable, assuming each store could even realistically get broadband service.

      every place that has 'free' wifi, is a place where they put in high speed internet for their 'inventory' system, and the 'free wifi' piggybacks on that internet
      • Re:Hmmm (Score:5, Funny)

        by austexmonkey (1108037) on Sunday June 08, 2008 @09:25AM (#23699869)
        'Thanks' for the 'explanation'. I've often 'wondered' how 'free wifi' 'worked' in 'restaurants' and the 'like'. I 'find' it surprising that 'satellite' is still used for 'inventory' 'systems'.
      • Re: (Score:3, Interesting)

        by Zero__Kelvin (151819)
        So what you are saying is that Starbucks partnered with T-Mobile to provide the access in 2002, rather than doing it themselves. You further imply that if Starbucks had not entered into a deal with T-Mobile, they would not be sued for violating it. Somebody mod the parent insightful! (I do consider it informative, but it has absolutely nothing to do with "the problem", which is contractual violation not technical implementation.)

        There should be a -1: Unable or unwilling to capitalize option though.
      • Re:Hmmm (Score:5, Informative)

        by Anonymous Coward on Sunday June 08, 2008 @10:37AM (#23700159)

        the problem, is that starbucks rolled out this wifi thing in 2002, and instead of putting in highspeed internet in each and every starbucks, they put in a wi-fi access point that relayed the data over a cellular network.
        Incorrect. TMO pulled T1's into virtually SBUX for backhaul. This is one of the reasons TMO could charge a premium. Not sure where you got the cellular idea.
      • Re:Hmmm (Score:5, Informative)

        by Ugliarch (698622) on Sunday June 08, 2008 @10:50AM (#23700229)
        I'm not sure that's quite true. As a technician for tmobile, I have been involved in setting up many tmobile hotspots and each one has been some sort of T1 connection to the site.
      • by Allador (537449)

        much cheaper than paying $40 a month per location for dsl/cable, assuming each store could even realistically get broadband service.

        I'm fairly sure this is not correct.

        I've looked at my traces and such while in there, and it doesnt appear to be a cellular network, nor does it have the ping times and latency associated with it.

        In addition, T-Mobile has been present in my city's starbucks for years before any sort of cellular data service was available here (that could reach 1.5mbps at least).

        Next time I'm over there I'll take another look, but I dont think this is correct.

        It's possible they do this for some sites where they cant get dsl

      • by RomulusNR (29439)
        they put in a wi-fi access point that relayed the data over a cellular network

        If that were true, then the wifi at SBUX would have been astonishingly slow, considering that TMO doesn't have anything better than EDGE in most of its markets.

        Oh, and not to mention that TMO doesn't even have towers in some states and rural areas but relies on GSM roaming agreements, some of which on small carriers that don't have HDR capability at all, never mind included in the agreement.

        Granted, they are not technically TMO's
    • Re:Hmmm (Score:5, Interesting)

      by Zero__Kelvin (151819) on Sunday June 08, 2008 @09:34AM (#23699901) Homepage

      "Maybe I don't understand, but if Starbucks is already paying them for having the wifi service, why can't Starbucks give it away/charge for it as they like? Did the original agreement require Starbucks to charge each user on behalf of TMobile or something?"
      Wi-Fi through T-Mobile is known as Wireless Hot Spots, and users do not pay Starbucks, they pay T-Mobile. Presumably Starbucks pays T-Mobile something under the theory that the access brings more customers. (Actually, that theory is true, as I have bought numerous Grande Cafe Mochas that I would not have otherwise purchased, because I decided to go to Starbucks instead of some other CSP (Caffeine and Sugar Provider) for the T-Mobile Hot Spot access.)

      They can't give it away or charge for it as they like because they didn't purchase the infrastructure; they have a contract. ObCarAnalogy : If I buy a car from a rental company I can do with it what I wish within the bounds of the law (and optionally physics.) If I rent a car I cannot let whomever I wish use it and charge them as I like.

      Disclaimer: I may have the law and physics part mixed up a bit. I forget which one is real and which is imaginary. Teh Maths are not my strong point :-)
      • by dkf (304284)

        If I buy a car from a rental company I can do with it what I wish within the bounds of the law (and optionally physics.)
        I think you'll find that the dictates of the laws of physics are enforced rather more stringently than any human laws (except perhaps those relating to taxation of ordinary people).
    • Re: (Score:3, Interesting)

      My understanding, having glanced at TFA and knowing someone who uses wifi in Starbucks, is that Starbucks doesn't pay them for the wifi service. You get an account with T-Mobile to use their service, which is based in Starbucks locations. T-Mobile probably pays Starbucks for the privilege.

      The contract with T-Mobile is set to expire soon, so Starbucks has now gotten a better deal with AT&T to provide free service for Starbucks-card-holding customers, and better rates for irregular ones. This is all fi
      • I think you've cotton-on to the interesting wrinkle.

        Starbucks has enough control of the network to provide access without the technical compliance of Tmobile.
        Notice that Tmobile has not "interrupted" service. It would seem that if TMobile were the provider, their first option in the event of nonpayment - would be to shut down the power switch.

        It appears that Tmobile doesn't have command and control of the network.

        I wanted to point out that a number of their competitors (Panera Bread being one) have offered
    • The deal will have been something like this:

      T-Mobile builds supports/manages the network and infrastructure
      T-Mobile charges folks to use the network and then gives x% of that revenue to starbucks (x is probably a fairly small number).

      5ish years ago, that looked like a pretty sweet deal to starbucks. They're not in a position to train staff at every store to manage / support the network (not without large cost anyway), so this way they got all their shops kitted out with a useful service for free, plus they
      • Re:Hmmm (Score:4, Informative)

        by Anonymous Coward on Sunday June 08, 2008 @01:12PM (#23700989)
        Yup, you are correct, I consulted for initial deployments in some markets. TMO is footing the bill for the free AT&T/Starbucks usage.

        If Starbucks so choose to have free access then the terms of the agreement require them to pay for the service out of their marketing or operating budget. Right now the free service with a drink/starbucks card is NOT being payed for to the provider, T-Mobile. That is what the beef is about.

        TMO agreed to a proper transition with free services to be handled by AT&T once the full equipment handover occurred.

        If Starbucks wants to offer free service before the full cut over, then AT&T needs to be paying T-Mobile for the usage.

        Remember there is a revenue agreement in place through 2009 where T-Mobile is the CURRENT provider until all the hw is moved over to AT&T.

        Make sense folks?
        • Exactly, Starbucks has promised a pay structure for customers to T-Mobile, it's a contract they willingly agreed to. By offering "free" wi-fi they are taking away the paying customers they promised T-Mobile... Sure TMO is getting paid for total bandwidth somehow, but the CONTRACT says they get paid per customer and TMO wants it to stick. In some ways AT&T is contract-jumping on TMO, encouraging Starbucks not to fulfill their obligations and courts really don't like that between businesses.

          This type if
          • Re: (Score:3, Informative)

            In some ways AT&T is contract-jumping on TMO, encouraging Starbucks not to fulfill their obligations and courts really don't like that between businesses.

            The phrase you are looking for is tortious interference [wikipedia.org], where someone influences a party in a contract to breach that contract, or otherwise works to prevent a contract being established by two other parties.

      • Re: (Score:2, Interesting)

        by rt793 (1177535)
        The deal is exactly like you have described. There are still approx. 6000 Starbucks sites that T-Mobile is required to support until the migration to the ATT network is complete. Starbucks was a major high maintenance customer for the T-Mobile HotSpot service - to the tune of 85%. When Starbucks spoke, T-Mobile jumped. One could never say "No" to Starbucks no matter how insane the request was for fear that they would take their business. In the long run, they did took their business to ATT. Some say it
  • sent text? (Score:5, Funny)

    by Anonymous Coward on Sunday June 08, 2008 @09:07AM (#23699813)
    T-Mobile sent me the text of a lawsuit they filed yesterday

    Just wait, they'll charge you 50 cents for that too.
  • Poor T-Mobile... (Score:2, Interesting)

    by Anonymous Coward
    T-mobile is one of those companies that have been charging exorbitant fees for basic Wifi service.

    Why would one feel sorry for t-mobile?

    The least one can do is investigate for possible price-fixing between operators of paid Wifi services.

    The costs to run a public WiFi service are pretty low (considering that all software is available as open-source, so no licensing fees).
    • by arth1 (260657)

      T-mobile is one of those companies that have been charging exorbitant fees for basic Wifi service.

      Really? I find that they're usually cheaper than competing services.
      Do you have an example of "exorbitant fees"?
    • Re:Poor T-Mobile... (Score:4, Interesting)

      by torkus (1133985) on Sunday June 08, 2008 @01:28PM (#23701073)
      As someone else mentioned, TMO is generally cheaper than their competetion. I'd love to see where the 'exorbitant fees' are.

      Ignoring that, the cost to run a public WiFi service isn't all that low if you want the ability to actively montior, track, and maintain the network. Yes, there's open source software available. How much of it is designed for centralized management of a 10,000 node public wifi network?

      Even more than that, you've got the cost of the internet service (e.g. T1 lines to each hotspot). Even if you went DSL, the cost for DSL/Cable to a *business* is far higher than the $20/month promo-deal you found on fatwallet.

      Could i run a single hotspot in a local coffee shop for low enough cost to give it away? Sure. Can you run one in every starbucks with 24/7 monitoring, status, and low down time for free? No. There's cost in there somewhere that has to be made up.

      In case you haven't noticed, ATT is throwing money at ever opportunity they can to build customer base. The iPhone and Blackberry Bold are good examples. I doubt they'll ever disclose how much they paid for those contracts, but it's huge. How long this game will last is anyone's guess.
      • by Allador (537449)
        Agreed.

        In addition, the quality of service of the wifi at Starbucks is excellent.

        I've been to so many 'free' wifi spots where the wifi was down alot, or just so badly managed and/or congested and/or oversubscribed that it was useless.

        I'd rather pay a few bucks a month and have something that 'just works' than have to roll the dice each time I sit down at a coffee shop.
      • That's what some hotel wants to charge for broadband access.
        That's $300/month or 6-10X what one pays for at home.
        Those are the hotels I have been staying away from.

        As for Starbuck, even paying $100-200/month is miniscule compared to their marketing expenses. Is it worthwhile to drive away customers to save $100-200 a month?

        The only benefit that I can see is limiting the time people can use the internet. That way, the tables would not be hogged by people who spend all day in there and buy 2 drinks and woul
  • by g0dsp33d (849253)
    I wonder why they are switching to AT&T?
  • by teslatug (543527) on Sunday June 08, 2008 @09:32AM (#23699895)
    I still don't get why every coffe place doesn't have free, unencumbered wifi access to everyone. It's a great way to get more customers. I always check if there is a free wifi before getting coffee some place. It won't cost them more than a few cents per coffee, which they could easily hide in their 3,4,5 dollar beverages. It boggles the mind.
    • by stickystyle (799509) on Sunday June 08, 2008 @09:35AM (#23699913) Homepage
      Freeloaders that never will buy coffee.

      Don't tell me that's not obvious to you.
      • by Lumpy (12016) on Sunday June 08, 2008 @10:01AM (#23700033) Homepage
        2 of the smaller coffee shops around here with free wifi solved that.

        you have a code on your recipt. that code is entered into the nocatauth screen to give you access.

        It's brain dead easy to do with IT people that know what they are doing. Maybe starbucks needs to hire competent IT people?
        • Re: (Score:3, Interesting)

          by houghi (78078)
          That would be the way I would do it as well. Advathage is that you can give more time at moments there are lesser people. You can even link it to a customer card, so people who come more often get more bandwith and/or more time.

          I would expect this to be standard. Just a code and a timelimit connected to it.
          • Re: (Score:2, Interesting)

            by rshimizu12 (668412)
            I think this is a great idea as well. Personally I don't understand why the coffee houses did not adopt this type of demand pull marketing years ago. it's ridiculous to think that people are going to pay another $30 a month for wifi. For Starbucks ATT service makes a lot of sense because they cater to a wide range of customers. For ATT it makes a lot of sense, because it gives users incentive to sign up DSL/U-verse service since it is provided free with the service. The Starbucks model is supplanting city
            • by Allador (537449)

              it's ridiculous to think that people are going to pay another $30 a month for wifi.

              Alot of people do. T-Mobile made alot of money in that deal.

              I pay for it (rather my business does) because its so damn convenient.

              I also have a Sprint EVDO RevA card, but I tend to use the t-mobile at starbucks alot more because:

              1. There's always one just right down the street.

              2. The quality of the service is excellent, and its NEVER down.

              3. It's much faster and lower latency than my sprint card.

              All that being said, you're right in that its not a reasonable deal for casual users. But a business offeri

        • by arth1 (260657)
          Except that won't help a bit if I want to poll my e-mail to my PDA. The user might not even have a web browser. Reinforcing the perception that internet = web, like you do here, is a Bad Thing.
          • Re: (Score:3, Interesting)

            by kidgenius (704962)
            Fine.... you create a set of randomized passwords. in order to use the service, you use the username of "starbucks" and one of the random passwords that is only good for one hour. You can tell your blackberry, phone, pda to use a certain login for the network, and that should do it. Same idea really.
        • by Corbets (169101)
          Starbucks does something like that here in Switzerland. You can go to the counter and ask for a little throw-away card that has a code valid for 30 minutes wifi access. It's free, but you can only get one at a time - you have to go up and ask for another to get more access.

          It works on the theory that you'll be too embarrassed to sit there freeloading and getting a new card every half hour for 4 hours in a row. In Swiss culture, for the most part, that works. I'm not so sure it'd fly back home in Chicago. ;-
        • So 2 small coffee shops, McDonald's, Et. Al. solved the problem of how to provide free Wi-Fi access by making it not free. Lets set them on the Cold Fusion problem immediately!

          I have also heard of women who are giving away free sex! every time you buy them a mink coat.

          (The parent doesn't mention Mickey D's, but they have been doing this for quite some time now as well)
        • there was a small coffee shop near my old place that had a great system set up.

          they provided free wifi, no strings attached. no codes, no log-ins, no purchase necessary, just bring your laptop and enjoy free internet.

          I once asked them why they don't charge or limit the internet. their reason was simple. 'running wifi is dirt cheep, the only expensive part is setting up and maintaining a system for charging customers to use it. and if you want to be competitive, the price is so low the profit you make on
        • by Allador (537449)
          Ahh, but now you're providing a for-fee service.

          It's got to be monitored, maintained, etc. You've got to have folks on standby to deal with it when it breaks.

          You have to have engineers and software folks integrate the POS software with your wifi management software.

          You've got to deal with software updates, hardware updates, hardware failures, line failures, attacks, spamming, and over-use.

          The second you do anything but put it up and say 'enjoy it if it works', it becomes tremendously expensive.

          But if you d
      • Re: (Score:3, Insightful)

        by newsdee (629448)
        I live in a city where every coffee house offers free open wifi to everybody. You don't even need to buy to get on it. And my town's neighborhood management council offers free wifi in the largest public areas (where most of the shops are). And they still manage to make money. If you're outside using the net and get thirsty, you're most likely to get into the coffeehouse and get a cup of something.

        The thing is that once most places offer free wifi, not having it is a disadvantage.

    • Re: (Score:3, Insightful)

      by falcon5768 (629591)
      a lot of coffee places I know DO give it away free, both local shops and some larger chains like Panara Bread and Atlanta Bread Comp. The whole reason I DONT go to Starsucks is because the coffee is not that great and having to PAY for crappy coffee and wifi service is too much for me when I can go down the street to someplace with a decent cup and free wifi.
      • by KGIII (973947)
        I have never been in a Starbucks. Odd but true. I was just thinking of that. But, well, I have done way too much traveling. I am not certain but it seems highly probable that in many areas where you can find a Starbucks you can also find some free wireless service. I am currently smack dab in the middle of nowhere. Vienna, Maine is the middle of nowhere. [wikipedia.org] There are two open wireless networks to fairly decent 1.5 Mb ADSL service, this is often the case.
        • Re: (Score:3, Interesting)

          You would think so, but there are market oddities that I've never been able to grok.

          Seattle is one of the more unwired cities, yet charging for wifi is the semi-accepted norm there.

          Portland, while arguably the most unwired, has an environment where charging for cafe wifi is culturally unacceptable. Starbucks still charges for it here, but being a corp controlled entity that receives marching orders from distant overlords, they really don't count.

          So, in some markets, charging for wifi may make business

          • by Methuseus (468642)
            You honestly believe that this is still true? I remember when I loved Starbucks coffee. But in the past few years the quality of the beans and baristas have gone down. The coffee 95% of the time tastes burnt, and the baristas are by and large rude, and seem to not know what they are doing. Smaller shops now do much better, from my standpoint.
    • by ScentCone (795499) on Sunday June 08, 2008 @09:48AM (#23699981)
      I still don't get why every coffe place doesn't have free, unencumbered wifi access to everyone

      For the same reason that the people who DO provide it without any connection to a transaction end up having all of their seats taken up by non-customers, and have to put up notices begging people to limit their use of the system during their peak business hours.

      I've had reason to pick sit-down-for-coffee-and-a-pastry places several mornings in the last couple of weeks. Within a couple hundred meters from each other: a Barnes & Noble, which uses AT&T for their $3.99/two-hours deal, Starbucks (which uses the above-mentioned, much more expensive T-Mobile deal), and a Corner Bakery Cafe, which loudly proclaims via storefront window stickers that all of their cafes now have free WiFi. Yes it's free, but it's intermittently wonkly, slow slow slow, and clearly wanders through a laborious proxy (just like the free service at Panera).

      There's outside seating at the Corner Bakery. Every morning and lunchtime it all fills up with people from the local office buildings. They walk in to Starbucks for the better cup of coffee, and then walk over to the Corner Bakery and sit down to use the free wifi. If I were managing that store, it would piss me off. As a customer with the decengy to give the Corner Bakera $3 and change for some eggs on toast, it pisses me off to have less use of the pipe because other people are hammering it (this morning, five people sitting outside onlone: one was streaming YouTube, and one was video chatting (badly). But what are they going to do, burn good will with people who might, one day, actually buy a sandwich from them, by running them off? So, the leeches win, and the actual customers they're hoping to attract lose. I guess they could put in six nodes and an OC48.

      The same local Starbucks couldn't possibly seat the number of camp-out road warriors who would hog their pipe if it were free to all. At least if you couple the use of the wifi service to the purchase of their served products, there's something redeeming in offering the service... and less of a need to run of the leeches.
      • by maxume (22995)
        If I were the manager of the bakery, I would start selling better coffee.
      • by Savior_on_a_Stick (971781) <robertfranz@gmail.com> on Sunday June 08, 2008 @10:08AM (#23700065)
        The problem is that your local Mom & Pop cafe isn't managing their wifi properly.

        Our cafes all offer free wifi, and it will always be free, and not tied to transactions.

        I was dragged into a Starbucks once a couple of years ago.
        Annoyed the crap out of me that I would have had to pay for wifi.

        I just upgraded one of our locations to 16/2, and another will get upgraded next week.

        I monitor usage to weed out activities that that can cause us liability - but that's about it.

        We've received two dmca letters to date, which caused me to go OpenDNS to block the p2p websites and I block unencrypted p2p at the router. The only dns block categories I use are p2p and phishing sites.

        Am I blocking the ability of someone to download the latest Ubuntu distro?
        Only if they are running unencrypted. And if they do hit a blocked site, customers are given a page telling them why and email and phone number are listed if they have any questions or concerns.

        I've had zero calls/emails so far.

        Our strategy may not work for everyone, but I like to think we have a better class of customer than most cafes.
        Certainly much higher than the mouth breathing foofoo coffee denizens of Starbucks.

        $95 a month is cheap to ensure a fast, reliable connection.

        • by nomadic (141991)
          The problem is that your local Mom & Pop cafe isn't managing their wifi properly.

          How so? All you've done is advocate the removal of all restrictions on a network. How does that solve the problem listed in the post you're responding to, that of too many non-customers using too much bandwidth?
          • by Savior_on_a_Stick (971781) <robertfranz@gmail.com> on Sunday June 08, 2008 @11:24AM (#23700387)

            I was explaining what I do - not offering a solution.


            If I had a problem with a couple of bandwidth pigs, I'd first try publically disallowing high bandwidth activities that I truly don't want - ie: unencrypted Bittorrent.


            Next would be to use proto based qos and drop high bw protos to the bottom of the heap.


            Following that would be to isolate any individual troublemakers and use mac based qos to slow their connection to unusability.


            There are *lot* of things that can be done to discourage certain types of usage.


            Again, I likely have a better class of user than most cafes, so it was a trivial matter to trim out the unwanted usage.


            If this is beyond the means of an individual cafe owner, it is easy to get help.

            Most localities of any size have some sort of volunteer group dedicated to ubiquitous free wifi.


            We have a group here that will go so far as providing the ap and supporting it as long as the owner springs for the internet connection. I've even seen them arrange a sponsor to pay for the connection in key areas where there are no existing free ap's.


            If the issue is one of simply too many freeloaders physically crowding out the paying customers, then, yes - you have a thorny problem if the cafe operators are technically challenged.


            We have a pretty tightly knit community and this has never been an issue, other than the cars in the lot sucking up free wifi in the wee hours of the morning. And even those are merely a curiosity. They don't displace paying customers. I suspect they are too embarrassed to occupy a seat without making a purchase.


            I'm glad we have such a community. I can walk into the cafe - announce that I need to reboot the router, and my customers have no problem asking me to wait a few minutes while they finish a quiz for their distance learning class. They have no problem approaching me about issues connecting, etc.


            And I'm not even in the cafes that much, other than to grab some nice french pressed single origin to start my day.


            Maybe I'm just lucky that my employer knows what he's doing, and our customers are generally fiercely loyal and wouldn't do anything to damage the community we enjoy.


            Every day I wake up happy to go to work, and consider myself fortunate to be well paid to do what I would be willing to do for free.

            • by Unoti (731964)

              That's all fascinating and useful information. But honestly, that's technically beyond half the slashdot readers, much less people that run coffee shops. Certainly there's a lot of slashdot readers who can do this stuff in their sleep, and of course they will be the ones to respond to this message and tell me what a retard I am, and how simply everyone is a network specialist except for me. I am fairly technical, but networks aren't my specialty. If I wanted to do even half the things you listed above, i

              • If I wanted to do even half the things you listed above, it'd take me at least a day or two of long hours of fiddling studying and researching.
                Wow a whole couple days of fiddling with something. Sure, everyone has "better" things to do, but that doesn't mean you couldn't play with it for a while over the course of a couple weeks and get it working like you want. It isn't rocket science, just a bit of RTFM.
              • by Jesus_666 (702802)

                But really your statements support the idea that requires labor and expertise (that is, expense) to provide this service and have it not suck.
                Show me one place where someone who has no idea what he's doing can provide you with good service. Of course offering Wi-Fi to your customers means that you somehow need to have access to someone who knows his networking. You need reasonably well-trained people for every kind of service.
          • by garett_spencley (193892) on Sunday June 08, 2008 @11:26AM (#23700389) Journal
            I have to wonder, as I've never used Wifi at a coffee shop, are these networks secured at all ?

            I admit that I don't really know the exact problems faced by these coffee shops, but assuming it's as simple as non-customers using up tons of bandwidth then why not print the WPA key on the receipts and change it each morning ? If you don't want to tie Wifi to a transaction then write it on the menu and make it so it's not visible from outside the coffee shop. That way you at least get people inside of your store, and business 101 says that getting people in the door is the first step towards making a sale. And lets face it, coffee shops are there to make money. If people are physically entering the store and sitting down at a table to use Wifi and not paying for anything then there's no reason not to ask them to leave. I mean restaurants and strip clubs don't have a problem asking non-paying customers to GTFO. Why is it different for coffee shops ?

            As for bandwidth hogging activities I don't really see any reason NOT to block bit torrent and p2p etc. Letting people surf the net and check their e-mail over a coffee seems, to me, to be the real reason to offer Wifi. Torrents and p2p don't just hog bandwidth they can create potential liability for the business. So while the GP didn't necessarily offer any solutions to big chains I have to agree with him that any coffee shop running into problems isn't managing their network properly.
        • by Allador (537449)
          You do realize that your case isnt typical, or even terribly repeatable?

          Unless you've got a fantastic location in a high traffic area where people have money, coffee shops are fairly low margin.

          Reading this post and the post below, you've got to be running at least $1000 a month in monitoring and consulting bills (equiv I know since you're doing it yourself).

          But most shops dont have people like you in them, and hiring people (like me) is going to cost money. This level of cost will just wipe out most small
      • by arth1 (260657)
        A simple solution is to turn down the signal strength on the radio, so the users have to sit inside to use the WiFi. Then they can be treated like any other user who sits without buying anything, i.e. asked to leave.
      • For the same reason that the people who DO provide it without any connection to a transaction end up having all of their seats taken up by non-customers, and have to put up notices begging people to limit their use of the system during their peak business hours.

        Print a one-time key good for half an hour after the purchase on the receipt. Let people pay for longer-listing keys at the register. You'll get some yobboes dumpster-diving for keys, yes, but it'll discourage most of the leeches.

        The reason that "fo
        • I agree that it's too hard to GET wi-fi at most of the places that offer it. McDonald's Wayport is the only chain I've seen that lets you pay for just 2 hours, but you still have to sign on the website and put in a credit card for $3 which would turn many people off. The store managers and workers know NOTHING about how it works and can't just take the $3 at the register.

          • by argent (18001)
            McDonald's Wayport is the only chain I've seen that lets you pay for just 2 hours, but you still have to sign on the website and put in a credit card for $3 which would turn many people off.

            I don't remember what the last place I used paid Wifi service at was, but it had a per-day and per-hour program, so you could pay just for the time you used... but you still had to sign up online.

            I don't understand what part of "don't make it hard for people to give you money" these people are missing, but boy are they m
      • Corner Bakery has free wi-fi now? Sweet! I'm going to have to check that out.

        By the way, if it works anything like Panera Bread's system, web browsing can be made a LOT faster by tunneling to your own proxy at home instead of using theirs.

    • by Tony Hoyle (11698)
      Nice idea but it doesn't work - the wifi costs to maintain, and someone has to pay for that. The local starbucks have both terminated their wifi recently (well, one of them nearly a year ago now) and have no plans to renew it. AFAIK there is no wifi at all now around here.
      • It costs virtually nothing to maintain a free access point.
        Granted, the company I work for is just large enough to employ me as a 3/4 time net admin, but any independent that doesn't have their own IT structure could easily have their isp set it up.
        I spend maybe an hour a week per ap peeking and poking, but that's only because I'm around anyway.
        • by AtariKee (455870)
          Where I work, we have free wifi. It's Directway/DirectPC, and it's so throttled (about 10k/sec average) that no one could possibly abuse it. Those who have tried have pretty much given up. At most, we have two or three people at one time who sit and drink their bottomless cup of coffee and use the wifi for more than a couple of hours,and that's usually during third shift when the place is dead anyway.
      • Nice idea but it doesn't work - the wifi costs to maintain, and someone has to pay for that.

        OK. Starbucks made approximately $672 million [yahoo.com] in profit during 2007. They also had approximately 8500 stores during that time. Assuming it costs in total $100 per store for wifi, That is still less than two tenths of one percent (0.2%) of Starbucks profit for 2007 alone. Somehow I don't think that will break the company...

        • MEGACORPS have to play by some rules little guys don't

          100.19 per MONTH covers my highspeed COMMERCIAL connection from comcast
          which I am not allowed to use to supply wifi to the public

          I do anyway

          I've never asked what the fee would be for a connection where I am allowed to do so.

          now-- imagine a starbucks where commercial cable modems aren't available, and a T-1 is required.

          100 per store won't cut it..
          • MEGACORPS have to play by some rules little guys don't

            100.19 per MONTH covers my highspeed COMMERCIAL connection from comcast
            which I am not allowed to use to supply wifi to the public

            Yeah, they get negotiating power and economies of scale. 8500 stores gives a LOT of negotiating leverage. A company I used to own paid $250/month for a shitty speed connection but we had no negotiating options as there were no competitors available. Starbucks isn't in that position.

            That said, the $100 figure was just an example. Even if the cost were 5 times that (possible though I think unlikely) it still is less than 1% of their annual profit. The cost of Wifi is a rounding error to Starbucks. I do

            • by Allador (537449)
              1% of annual profit is NOT a rounding error.

              Thats material and noticeable.

              And you're just covering the cost of the monthly fees.

              Plus hardware, plus setup, then maintenance, then a support system so people have someone to call when it doesnt work, etc etc.

              It adds up fast.

              The biggest reason why a company like Starbucks wouldnt do it is because its not their core business. It takes some infrastructure, specialized knowledge, and a whole staff to manage a network like this, keep it up, and provide end-user sup
              • by sjbe (173966)

                1% of annual profit is NOT a rounding error.
                Thats material and noticeable.

                First off, figure of speech. Second off, you're assuming that all costs would be in addition to their current costs - highly unlikely. Third, you are assuming there are no offsetting revenues - if there aren't there is no point in offering the service in the first place. Fourth, $500/month/location (which is the amount to get to 1% of annual profit) would almost certainly be more than it would be worth to any restaurant - their margins aren't that good - so clearly it does not cost that much. Finally y

                • by Allador (537449)

                  you're assuming that all costs would be in addition to their current costs - highly unlikely.

                  Actually its even worse than that, as they likely get revenue from T-Mobile now, so it would go from a (small) income stream to a large cost.

                  Third, you are assuming there are no offsetting revenues - if there aren't there is no point in offering the service in the first place.

                  Any offsetting revenues they're already getting with T-Mobile, so no net change there.

                  Finally you are assuming no economies of scale which Starbucks clearly would have.

                  Actually its the other way around. It's alot easier for a single mom & pop store to put up a crappy router & wap and just say, "If it works, it works." A company the size of starbucks cant easily do that. You are correct in that if they did build up a support environment

    • Re: (Score:3, Insightful)

      by klapaucjusz (1167407)

      I still don't get why every coffe place doesn't have free, unencumbered wifi access to everyone. It's a great way to get more customers. I always check if there is a free wifi before getting coffee some place.

      You're assuming that they have their own ADSL link to every shop. They don't. They decided to let T-Mobile and AT&T control their networking infrastructure, and the operators are understandably less than thrilled by the free competition.

      In other words, they decided to give control of their network to a potentially hostile company, and they're getting what they bargained for.

    • Because Starbucks has chosen to cater to a different audience. They've already more or less maximized their customer base, and people don't go to Starbucks for the Wifi. Offering it for free would cost them money and gain them nothing.

      Instead, Starbucks has decided to target a different group: business customers. These are people who don't actually pay the $10 connection fee for one-time use; they have Wifi hotspot plans with their Blackberries and iPhones, or their company has access to such a plan. T
  • Lawsuit happy.. (Score:5, Interesting)

    by WhatAmIDoingHere (742870) <sexwithanimals@gmail.com> on Sunday June 08, 2008 @09:42AM (#23699947) Homepage
    These are also the people who tried to copyright the color magenta. They also have sued at least two companies that I know of over 'their' color.

    Maybe these lawsuits are the last flailing movements of a dying beast.
    • Re:Lawsuit happy.. (Score:5, Informative)

      by TheoMurpse (729043) on Sunday June 08, 2008 @11:38AM (#23700479) Homepage
      Trademark, not copyright. Here [engadget.com]. I don't really care about the merits of T-Mobile's claims, but there is Supreme Court precedent saying that a color can be trademarked in certain narrow circumstances (the alleged holder must show "secondary meaning"--basically, that customers associate the color with the brand). Recall that trademark traditionally (and arguably still mostly) is geared towards alleviating customer confusion. In that light, such a trademark might make sense (again, not saying it does in T-Mobile's case, as I don't know anything about it).

      See Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (1994) [justia.com] for illumination. I disagreed with the concept until I studied the case in IP Law. Now I'm neutral.
      • by Jesus_666 (702802)

        In that light, such a trademark might make sense (again, not saying it does in T-Mobile's case, as I don't know anything about it).
        In Germany, magenta is the Deutsche Telekom (which T-Mobile is a part of) color. Most of DTAG's* corporate identity is built around the color magenta, the upper-case T and small squares. Combine two of the three (or have a product strting with "T-") and most people in Germany will assume it's a DTAG product.
        • by dave1791 (315728)
          Very true! I associate the color magenta, the upper case T and small squares with incomprehensible documentation and poor customer service ... err... Deutsche Telekom.

          • by Jesus_666 (702802)

            Very true! I associate the color magenta, the upper case T and small squares with incomprehensible documentation and poor customer service ... err... Deutsche Telekom.
            Yes, that's the other cornerstone of DTAG's corporate identity. ;)
    • These are also the people who tried to copyright the color magenta.

      The T-Mobile logo is not some lousy magenta, it is Pantone Rhodamine Red!

    • by SeaFox (739806)

      Maybe these lawsuits are the last flailing movements of a dying beast.

      A dying beast, you mean a division of Deutsche Telecom? Yeah, the largest phone company in the E.U. must be on their last breath over this.
  • Huh? (Score:2, Insightful)

    by JustNiz (692889)
    How is it comapnies can sue for _NOT_ doing buisness with them?

    Maybe I'm missing something but this sounds like the equivalent of getting a lawsuit from Dominos because I ordered a pizza from Papa Johns instead.
    • Re: (Score:2, Insightful)

      by maxume (22995)
      The original agreement with T-Mobile is probably exclusive in some way. It isn't like Domino's suing you because you ordered from Papa John's, It's like Domino's suing you because you let Papa John's use the pizza booth in your living room, when you had agreed to only allow Domino's to use the booth.
    • Contracts (Score:3, Informative)

      by digitalderbs (718388)
      FTA :

      The suit notes, "If AT&T or Starbucks wanted to offer 'free' Wi-Fi in non-transitioned stores for Starbucks customers, as they are now doing, they should have - and, indeed, were contractually required to - negotiate such an arrangement with T-Mobile."
  • by brundlefly (189430) on Sunday June 08, 2008 @11:52AM (#23700545)
    There's nothing about Wi-Fi technology which would prevent AT&T and T-Mobile from both being offered in the same stores. Choose the provider whose price suits you best. (Per-hour for T-Mobile, or mandatory occasional coffee purchase for AT&T.)

    If T-Mobile has no exclusivity contract, then my ruling would be that they are up the creek.

    Then again, IANAJ.
  • I'm at a loss trying to decide who I have less sympathy for--T-Mobile for thinking they can charge $10 for a Wi-Fi connection, or Starbucks for thinking that providing the $10 connection is going to bring in the 'Net-savvy customer.

    Panera Bread Company and McDonald's are both offering free (as in beer) Wi-Fi access. In my experience McD's Wi-Fi is not terribly consistent--it appears to depend heavily on the technical sophistication of the local franchise owner. Panera Bread, on the other hand, has been un

    • by Allador (537449)

      I'm at a loss trying to decide who I have less sympathy for--T-Mobile for thinking they can charge $10 for a Wi-Fi connection, or Starbucks for thinking that providing the $10 connection is going to bring in the 'Net-savvy customer.

      You're not understanding the situation.

      Hardly anyone at Starbucks pays per-day fees, with the rare exception of someone travelling.

      The vast majority of users are on a per-month unlimited plan.

      They're professionals and business people, who use starbucks and t-mobile all over the country to get their business done.

      They're not trying to bring in 'the net-savvy customer'. They're trying (and succeeding) to bring in the business customer, cause he's got a business who will pay per month fees forever.

  • My local coffee chain has free wi-fi access, no strings attached. You don't have to buy a coffee officially, you might get some stares if you don't. There's not two hour limit or any crap like that. They need the connection anyway for credit card charges and to talk to the home office for inventory and such.

    T-Mobile's "$6 an hour, $10 an day, or $40 an month" was just frickin' ridiculous.

    • by Allador (537449)
      What do you do when the wifi isnt working?

      When the wap is starting to fail, or the barista rebooted the network equipment in the wrong order, or when there are too many people on doing p2p and it doesnt work worth a damn.

      This happens all the time in the 'free' wifi places I've been to. Whereas with T-Mobile at Starbucks, it always works. It's fast, low latency, and I have someone to call if there is a problem.
      • by jgoemat (565882)
        The only time I've ever had a problem with it, the barista reset the wireless router and it started working again. I've never had speed issues due to people using P2P.

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