Upset T-Mobile Sues Starbucks over Wi-Fi Deal

By Alice Turner
22:17, June 8th 2008
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Upset T-Mobile Sues Starbucks over Wi-Fi Deal

Bellevue-based T-Mobile USA Inc. has sued Starbucks Corp. as the coffee chain allegedly breached the contract and allowed AT&T to offer its wireless Internet service inside the stores through T-Mobile’s equipment. T-Mobile's 12-page complaint was filed June 5 in New York State Supreme Court in Manhattan.

T-Mobile is claiming Starbucks has secretly allowed AT&T to provide a free Wi-Fi service in no less than 7,000 U.S. Starbucks stores. According to their deal, T-Mobile had the exclusive right to "sell, market and promote its services" in Starbucks stores until the conversion to the AT&T system would be complete.

The Starbucks - T-Mobile deal dates back to 2002 and was supposed to end this year, as both parties had agreed. However, it appears that Starbucks was a little impatient and began using AT&T's service while T-Mobile is bearing the cost and burden of that offer, because it still provides equipment and technology in all but two of Starbucks' U.S. markets.

Starbucks will offer free Wi-Fi from AT&T at its locations in the United States, but only to customers who have the company's rewards card and use it at least once a month for purchases. In fact, you need to purchase a so-called "Starbucks Card", which is essentially a prepaid... coffee card. Furthermore, the card has to be registered online for the rewards program.

In addition, AT&T will send you four solicitation e-mails per year. The "free" wireless is actually two consecutive hours a day. This appears to mean that you can only connect once a day, for maximum two hours. Also, new members also receive a voucher for a free drink.

Starbucks Card holders who have enrolled in the Starbucks Card Rewards program get the benefit of complimentary syrup and milk for certain drinks and free refills of hot and cold coffee as well as a free "tall" beverage with the purchase of a pound of whole bean coffee.



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