T-Mobile Sues Starbucks Over Free Wi-Fi Deal

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)."

Comments

Hmmm

[Thyamine]

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:Hmmm

[kesuki]

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 connection. in some cases, they use satelite for the inventory system ugh.

Re:Hmmm

[austexmonkey]

'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:Hmmm

[Zero__Kelvin]

"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 :-)

Re:Hmmm

[WhatAmIDoingHere]

You actually CAN let whomever you wish use it and charge them whatever you want. But if anything happens to the car, you would be responsible for the damage. And if you weren't driving, there's all kinds of legal stuff in there.

But you CAN let someone else drive and charge them for it. Just like I CAN download movies of the bittorrents. Just because something is illegal doesn't mean you can't do it.

Re:Hmmm

[Zero__Kelvin]

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

[Zero__Kelvin]

The discussion was about what the law allows. The "can" in my post refers to that, and my legality versus bounds of physics quip was intended to make that clear to the quick witted. I am certain it served its purpose.

Re:Hmmm

[WhatAmIDoingHere]

And the law allows you to do anything as long as you're not caught.

Re:Hmmm

[maxume]

I'm normally all for the tiresome parsing of other people's statements in ways that they clearly did not intend, but you are really pushing it here.

Re:Hmmm

[Zero__Kelvin]

I have no idea what you are doing here. You should be off having sex with animals, which - by your argument - the law has been allowing you to do for years now. (See parents SlashID and E-Mail address if this sounds like it comes from the ether.)

Re:Hmmm

[Anonymous Coward]

"I think your second comma should not be there. So don't be too harsh on others!"

A) The comma is needed, and in the right place
B) There is a big difference between a misplaced comma, and a failure to capitalize every sentence

Re:Hmmm

[menace3society]

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 fine and dandy, but the deal is that until the AT&T roll-out is complete, the existing T-Mobile deal is to stand. However, it appears that Starbucks has somehow disabled the authentication for the T-Mobile access points, so that all their locations can have free wifi.

Someone correct me if I'm wrong, though.

Re:Hmmm

[Anonymous Coward]

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

[Ugliarch]

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.

Re:Hmmm

[ConfusedVorlon]

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 make some extra cash.

Now they're giving away the access, and t-mobile are unsurprisingly pissed off. They built a great big network and now they aren't getting paid for it's use. Moreover, t-mobile still have to provide a call centre to deal with people who can't connect and maintenance for hotspots that break.

Re:Hmmm

[Anonymous Coward]

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?

Re:Hmmm

[kesuki]

"Not sure where you got the cellular idea."

not sleeping last night didn't help. oh well.

Re:Hmmm

[mabhatter654]

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 thing is common when management doesn't really understand the corporation's agreements with their suppliers in search of a "good deal". Companies like Microsoft in the 1990's really encouraged companies to break contracts as a matter of business and if enough customers jump their contracts at once, the original company won't be in business long enough to sue!

Re:Hmmm

[Anonymous Coward]

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 connection.

So is this yet another case of someone selling "unlimited highspeed internet" and then being upset when the customer wants to fully utilize it?

Re:Hmmm

[Achromatic1978]

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, 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:Hmmm

[rt793]

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 was T-Mobile's pass on the iPhone the motivated Starbucks to seek another provider. Even T-Mobile's gallant efforts to deploy the iTunes music service was not enough. Let the games begin.

Re:Hmmm

[rt793]

All Starbucks sites have at a minimum have a DS1 connection.

Re:Hmmm

[mabhatter654]

yep, that's it.

Re:Hmmm

[dave87656]

they put in a wi-fi access point that relayed the data over a cellular network. That must be terribly slow. What kind of speeds were they offering? If you had 25 people connected, it seems even a good DSL or Cable connection would be slow.

Re:Hmmm

[dkf]

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:Hmmm

[Anonymous Coward]

Who let Shatner in here?

Gone downhill man. There's less riffraff on MSN!

Re:Hmmm

[AmericanInKiev]

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 free wifi years ago. Their market share has dropped while at the same time, WiFi has become more and more popular with consumers. I doubt that Starbucks has any real choice here but to "Offer" free wifi, and pay the damn piper (Tmobile) as just punishment for having off-loaded the WiFi in the beginning.

Shame on Starbucks, and shame on their shareholders for having attempted to rape and pillage consumers for WiFi. May their Stock rot in hell.

Re:Hmmm

[ThatFunkyMunki]

there's no need to be a fucking asshole about capitalization. it's the fucking internet, nobody but you gives a shit about whether a fucking letter is capitalized or not. the content is the same, you're just being a jackass.

Re:Hmmm

[Anonymous Coward]

I think you've cotton-on to the interesting wrinkle.

Wow.

Caught. On.

How the hell you got "cotton" out of that, I'll never know.

Assuming you might have meant something like "caughten", then, still wow. Damn son, I hope English isn't your native language.

Re:Hmmm

[Allador]

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, but not generally.

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 connection. in some cases, they use satelite for the inventory system ugh. I'm also fairly sure this isnt true. I've been to a large chunk of the major cities in the US, and have visited multiple starbucks in each one, and I've never seen a 'free' wifi at a Starbucks.

Re:Hmmm

[RomulusNR]

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 lines, as TMO is not in the wireline business --- but TMO is responsible for and paying for them. If SBUX/ATT are giving away unaccounted, unmetered access over TMO's leased lines, without paying them for the added usage, that's quite a bitch-slap. That's like you self-inviting your entire neighborhood to my birthday party.

Re:Hmmm

[RomulusNR]

So is this yet another case of someone selling "unlimited highspeed internet" and then being upset when the customer wants to fully utilize it?

Nope, not at all.

Initially the TMO hotspots were symbiotic. Everyone that wanted to use SBUX hotspots paid TMO, not SBUX. SBUX got the benefit of offering WiFi without having to actually pay for the work to do it. TMO got the benefit of well-traveled operating locations.

Then, SBUX drove ten miles across Lake Washington to TMO and said "It's not you, its' us. We want to start siting other people." (I guess they then went five miles up the 405 and had a quickie.)

As part of the breakup, TMO said, okay, we'll let your new lover visit our house, if he pays rent, but you can't have anyone else over.

And SBUX broke that last bit of the deal, letting a bunch of their freeloading squatter friends to crash on the couch whenever they want, without checking with TMO first or giving TMO anything in return.

sent text?

[Anonymous Coward]

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...

[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).

Re:Poor T-Mobile...

[arth1]

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...

[torkus]

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.

Re:Poor T-Mobile...

[Anonymous Coward]

As someone else mentioned, TMO is generally cheaper than their competetion. I'd love to see where the 'exorbitant fees' are... Cheaper? Cheaper than what? $9.99 for a day pass when I just need to use the wi-fi for a 45 minute meeting where I have already bought my colleagues coffee is very exorbitant - especially in the midwest.

This is why I go to Panera - completely free wifi - except at the cost of logging in with an email address for their marketing emails...

Re:Poor T-Mobile...

[Anonymous Coward]

In Australia, paying Telstra $9.99 will get you 15 minutes.

I'd love to be able to pay $10 a day in a wifi hotspot - particularly somewhere like a hotel.

Re:Poor T-Mobile...

[Allador]

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.

Its crystal clear...

[Doorjam]

T-Mobile hates coffee drinkers.

Re:Its crystal clear...

[icebike]

Or maybe Starbucks does?

Of all the sit-down coffee shops I visit, Starbucks is the only one that has been charging for wifi over the past two years.

Whats up with that?

Re:Its crystal clear...

[Allador]

As I've said elsewhere, there are tradeoffs.

In my experience, a large percentage (ie, the majority) of 'free' wifi spots are down or so slow to be useless a significant amount of time. This is a hassle, and costs me.

Whereas if I go to a starbucks, its always up (4+ years with 100% service for me), and the speed and latency are excellent (1.5mbps synchronous, good latency).

This quality guarantee is worth the $30/month for many people.

You're right in that it DOES suck for the casual user though. Not everyone makes their living off their computer and so can justify spending the money.

However, for people like myself and others, the T-Mobile/Starbucks thing has been a godsend the past 5 years.

Quality coffee, with high consistency, and a high-quality wifi connection anywhere in the country that you go. Hard to beat it, from a business user standpoint.

hmm

[g0dsp33d]

I wonder why they are switching to AT&T?

Re:hmm

[WhatAmIDoingHere]

Because AT&T threw money at them. The iPhone and Starbucks target demographics overlap heavily.

Re:hmm

[nomadic]

The iPhone and Starbucks target demographics overlap heavily.

Just thinking about that demographic makes my skin crawl...

Re:hmm

[iknowcss]

LOL what's a demographic?

Sent from my iPhone

Re:hmm

[Anonymous Coward]

Never you mind. Now finish drinking your koolaid.

Sent from my Nokia E70

Re:hmm

[WwWonka]

a demograph# is a 3rr% what **s caaaaaaa.....ohh&& fffk it sent from my T Mobile phone

Re:Does anyone actually Care

[Anonymous Coward]

I do not do T-Mobile or Starbucks. How is this even close to Nerd News?

It involves caffeine and computers, how would it not be interesting to nerds? What we have here is a Pringles can full of burnt coffee causing a failure to communicate.

Free wifi should be universal

[teslatug]

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.

Re:Free wifi should be universal

[stickystyle]

Freeloaders that never will buy coffee.

Don't tell me that's not obvious to you.

Re:Free wifi should be universal

[falcon5768]

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.

Re:Free wifi should be universal

[ScentCone]

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.

Re:Free wifi should be universal

[Tony Hoyle]

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.

Re:Free wifi should be universal

[klapaucjusz]

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.

Re:Free wifi should be universal

[Lumpy]

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:Free wifi should be universal

[maxume]

If I were the manager of the bakery, I would start selling better coffee.

Re:Free wifi should be universal

[KGIII]

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. There are two open wireless networks to fairly decent 1.5 Mb ADSL service, this is often the case.

Re:Free wifi should be universal

[Savior_on_a_Stick]

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.

Re:Free wifi should be universal

[Savior_on_a_Stick]

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.

Re:Free wifi should be universal

[Savior_on_a_Stick]

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 sense.

A lot depends on the ethic your company has and what drives it.

We're coffee driven - best beans our buyer can find, roasted by the best roasters in the world, prepared by baristas who have been selected for their passion for coffee.

That's not meant as an advertisement or anything.

It's just that we have one focus, and selling wifi, or panini, or anything else that detracts from serving the best cup possible just isn't going to happen.

So our free wifi is in place because of both who we are and where we are.

Re:Free wifi should be universal

[nomadic]

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?

Re:Free wifi should be universal

[houghi]

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:Free wifi should be universal

[arth1]

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:Free wifi should be universal

[Savior_on_a_Stick]

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.

Re:Free wifi should be universal

[garett_spencley]

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.

Re:Free wifi should be universal

[Anonymous Coward]

My local coffee shop has free wifi. There never seems to be a problem with seating, speeds as good as my own cable at home and faster than my employer's network.

Clearly, it *can* be done. Starbucks/TMobile/ATT are just not the people to do it.

Re:Free wifi should be universal

[arth1]

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.

Re:Free wifi should be universal

[Methuseus]

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.

Re:Free wifi should be universal

[rshimizu12]

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 wide wifi, because they have so many locations.

Re:Free wifi should be universal

[kidgenius]

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.

Re:Free wifi should be universal

[blackest_k]

Hot Spot's always seem a bit pricey for what you get.

however now i have a connection where ever I go since I got a skypephone from
3 I am not that keen on the contracts but as pay as you go its great
buy £10 top up convert £5 for internet access (£2 would get you tv for the month)
which leaves £5 for calls.

go into the connectivity menu choose bluetooth modem or usb (bluetooth works fine for ubuntu) and i just use pppd call gprs in the terminal and my laptops connected.

They also do a linux friendly usb dongle with hispeed internet (1gb a month for £10) but for light use the skype phone is great plus skype to skype calls are free for 5000 minutes talk time or 10,000 texts.

so really i am not bothered where i drink my coffee, using codes, and portals is no longer an issue.

sorry if i sound like a raving advert for 3 but really in the uk you can not do better than their mobile data service.

T-mobile here does web'n'walk for £7.50 a month but it really is web only.

Re:Free wifi should be universal

[Anonymous Coward]

how about entering the 20th century and getting a web browser for your pda?

Cripes most people gave up their crappy early 90's PDA a long time ago. and all current pdas have a web browser.

Or do you not know how to use your pda?

Re:Free wifi should be universal

[Anonymous Coward]

The coffee 95% of the time tastes burnt

That's the style. Some people like it roasted even more, but not in the US. Most places in the US do a light or medium roast. Starbucks (and most northwest coffee shops) does a dark roast. This is a choice, not a mistake. You probably prefer a medium or light roast. Starbucks does carry some coffee with those roasts, but very few. Going to Starbucks and complaining that the coffee is too roasted is like going to a sushi place and complaining the fish is under cooked.

Re:Free wifi should be universal

[Unoti]

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, it'd take me at least a day or two of long hours of fiddling studying and researching.

What you're suggesting is good solid information. But really your statements support the idea that requires labor and expertise (that is, expense) to provide this service and have it not suck.

Re:Free wifi should be universal

[AtariKee]

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.

Re:Free wifi should be universal

[newsdee]

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:Free wifi should be universal

[KevinIsOwn]

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.

Re:Free wifi should be universal

[Jesus_666]

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.

Re:Free wifi should be universal

[Anonymous Coward]

The larger shops will be slower to offer access because rollouts affect thousands and tens of thousands of stores rather than a few hundred regional stores. While smaller shops are more nimble, larger shops try to save every penny by taking time to observe how to implement something in a cost-effective way. If it doesn't offer free wifi, a lack of free wifi probably probably doesn't affect its bottom line much.

It does not boggle the mind when a large company is cautious because it is large enough to save millions simply by changing reducing the cost of an item by a tenth of a penny.

Re:Free wifi should be universal

[FewClues]

Have you ever tried to get a seat at a Starbucks around 3:30 in the afternoon? So now you have an additional reason for those airheads to sit around talking about boys at the office.

Re:Free wifi should be universal

[Anonymous Coward]

the mouth breathing foofoo coffee denizens of Starbucks.

What are you talking about? I walk past three on my commute through town. Looks like an ordinary mix of people drinking coffee to me.

I was dragged into a Starbucks once a couple of years ago.

I haven't been inside one for years myself -- since I live downtown I've no need to join a lineup or sit in a store. But should I enter I don't expect the people I see sitting inside and outside will suddenly mutate.

You really need to get a grip on your elitist fantasies.
http://www.penny-arcade.com/images/2002/20020722l.gif

Re:Free wifi should be universal

[Corbets]

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. ;-)

Re:Free wifi should be universal

[tachyonflow]

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.

Re:Free wifi should be universal

[Zero__Kelvin]

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)

Re:Free wifi should be universal

[mr_matticus]

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. The non-free Wifi providers (T-Mo, AT&T, Boingo or whoever, etc.) don't make most of their money on one-off connections and single day users. Those people will find some place that offers it for free or simply do without it. AT&T has instantly expanded its customer base by giving most of its DSL customers the same, integrated access, as its Mobility users.

The cost is therefore irrelevant, and in exchange, charging users for it acts as a bar to overcrowding as well as maintains a consistent quality of service. Starbucks installations are hefty boxes with commercial-grade switches and gateway hardware, connected to pricey T1 (and in some locations, T3) dedicated backbones. The management costs and service contracts easily add up to something in the $1000/mo range for providing the service, so the provider charges to recoup that, and Starbucks doesn't pay it for everyone because it would be counterproductive.

Business travelers know that they can get reasonably fast, reliable connections by visiting Starbucks. That has increased their sales and the store visits. It's also a welcome service that many places still do not provide. Independent coffee shops with a DSL modem and a D-Link router aren't competitors in the slightest for the customers meant for Starbucks' Wifi connections.

Re:Free wifi should be universal

[Anonymous Coward]

I think the parent is speaking from the perspective of a smaller shop.

He used "they" to describe Starbucks and mentioned that they have free wifi.

But I agree, Starbucks coffee tastes godawful most of the time.

Re:Free wifi should be universal

[Anonymous Coward]

Starbucs has a new roast, Pike Place Blend or something like that, and they roast it less. Next time you need to go to a starbucks try that.

Re:Free wifi should be universal

[falcon5768]

no its NOT a choice and is very much a mistake. Drink any coffee from a GOOD roaster who does a dark roast and you will realize how terrible Starbuck is. Starbucks uses rancid beans that are overroasted to cover the fact the oils have gone bad. This is well know by coffee connoisseurs and they will tell you NEVER to think Starbucks makes good coffee.

Re:Free wifi should be universal

[theheadlessrabbit]

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 only covers the cost of maintaining that system.'

free wifi with no oversight is just less bother for them, and it makes no difference to their bottom line.

now i live in korea (south) and every single coffee shop, hair salon, bus station, restaurant, etc. has free wifi, most have computers that are free to use, too. so in korea, the young people can very easily not use email while they drink their coffee.

Re:Free wifi should be universal

[olehenning]

Slightly redundant. WPA isn't really secure when everyone knows the PSK, because when WPA-PSK is used, then the PSK acts as the Pairwise Master Key, from which encryption and integrity keys are made. If you ask me, each receipt (or other source of info) should contain a automatically generated username and password that goes to a RADIUS (or similar) server. Allow the username and password to stay alive for as long as the user is connected. Once he disconnects, he needs a new set.

Re:Free wifi should be universal

[Savior_on_a_Stick]

I don't ever make the claim that our connection is secure in any sense. I do use the OpenDns phishing group because it's one click to cut way down on folks accidentally ending up somewhere they shouldn't be. I make BT more of a pain, simply as part of due diligence. I use client isolation, so that the customers can't browse each others drives, but that it in terms of security. I think there was one occasion where a manager had to explain to a customer that he would need to be a bit more discreet with his screen full of porn. We're an 'indy' coffee company. Our customers would be disappointed if I went too far in trying to make the web a safe experience for them. Suits me - I don't have the inclination to micromanage the internet. I don't even consider whether wifi users are making purchases or not. For us, it's irrelevant. I do want to add a brief splash/tos that would be displayed once per user per day, but even that isn't a real high priority.

Re:Free wifi should be universal

[Allador]

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 do put it up for free, you get saddled by freeloaders and people who abuse it, which makes it not work very well for the paying customers.

The problem is that its not as easy as people think. The second you make it a part of a business, the economics change tremendously.

Re:Free wifi should be universal

[Allador]

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 offering wifi at its stores is more complicated and expensive than you think, and there are tradeoffs at every point.

Re:Free wifi should be universal

[Allador]

Compared to what.

Sure it may not be the top 1% connoisseur level, but its a step above all the crappy mom and pop shops around.

The vast majority of independent coffee places make bland, tasteless coffee, and dont have a clue of the difference between good and bad.

At Starbucks, if you go it may not be the best of the best, but its usually going to be a cut above most things around it, and have a huge selection, insanely friendly and helpful staff, clean stores, and quality wifi.

If you go to the big cities, sure there are some top notch independents or small chains out there, but they're rare. Starbucks is in the top 10%, but there are better.

Mind you, many cities, like my home city, unfortunately, doesnt have anything better locally other than going to a high-end roaster yourself and making your own coffee. But who wants that.

Re:Free wifi should be universal

[Allador]

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 coffee shops.

Most small shop owners struggle to remember to reboot the cable modem BEFORE the wifi unit, and dont touch it unless their customers complain.

And hell, most cities dont even have 16/2 available, or if they do, for anything less than $500 per month.

So yes, you've done some neat stuff, but you're a one-off.

Your experience and approach is not generally repeatable for other small coffee shop owners.

Re:Free wifi should be universal

[Allador]

Thank you!

It's amazing how no one else around here gets this.

bandwidth cap?

[Anonymous Coward]

Does offering the free internets significantly increase the bandwidth Stabucks uses from AT&T/T-Mobile?

Did T-Mobile actually make the mistake of offering them a REAL unlimited plan?

Lawsuit happy..

[WhatAmIDoingHere]

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..

[Anonymous Coward]

They trademarked the color magenta. It is quite common for companies to trademark a color. John Deere is known for its green machinery. A salt company whose name I can't remember has (or had) a slogan about being the one in the yellow bag.

Re:Lawsuit happy..

[TheoMurpse]

Trademark, not copyright. Here. 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) for illumination. I disagreed with the concept until I studied the case in IP Law. Now I'm neutral.

Re:Lawsuit happy..

[Jesus_666]

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.

Re:Lawsuit happy..

[pyrrhonist]

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!

Re:Lawsuit happy..

[SeaFox]

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.

Re:Lawsuit happy..

[dave1791]

Very true! I associate the color magenta, the upper case T and small squares with incomprehensible documentation and poor customer service ... err... Deutsche Telekom.

Re:Lawsuit happy..

[Jesus_666]

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. ;)

Re:Does anyone actually Care

[Anonymous Coward]

News flash! The scope of nerdity is not limited solely to things that you "do".

Sour Grapes?

[coolgabe]

Look it up before you use a phrase you don't quite understand.

Huh?

[JustNiz]

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:Huh?

[maxume]

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.

Re:Huh?

[Anonymous Coward]

How is this modded insightful? Maybe your analogy would wok if you ordered pizza from Papa Johns and then Papa Johns walked into Dominos and made your pizza using Dominos kitchen, ovens, ingredients, etc. Pretty huge difference.

TMO purchased and installed the network. Reading the click-through, and using common sense, they also had some control over who else can use the network (which other operators, and the nature of these roaming sub agreements). SBUX apparently violated the agreement and tried to cut TMO out. SBUX simply jumped the gun as the agreement was nearing the end.

Contracts

[digitalderbs]

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."

t-mobile vs starbucks

[Anonymous Coward]

t-mobile sucks anyways. that is the worst service provider i ever head :D And I am not going to order their service any more.

go go starbucks! I will come more often

A case for the FTC?

[Perp Atuitie]

Seems like the antitrust guys need to look at this marriage between AT&T and Starbucks. With this duopoly in place nobody else will have a chance in the overpriced crap market.

Starbucks can afford it

[sjbe]

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 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...

But does their contract guarantee exclusivity?

[brundlefly]

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.

No, no No! I do NOT work for SB

[Savior_on_a_Stick]

I agree that Sbux coffee is utter ass. I give kudos to Bux for educating people that there is coffee beyond what the grocer offers, but they are now doomed by their own success. They didn't build their business on being the best - they built it on being better than what was currently available. They still are better than what was available - in the '70's. Specialty roasters have moved on.

Dark roasted coffee's are generally bunk. I can tell you that at least one roaster (not us) uses dark roasts for all their misroasted coffees, on the assumption that anyone buying dark roasted coffee has such an undifferentiated palate that they'll never know the difference.

SB:Coffee::McD's:burgers

Fortunately, I still have a taste for generic slapped together burgers.

I have no taste for overroasted generic beans brewed by generic baristas that have no clue what's going on under the hood when they brew.

I doubt your figure

[way2trivial]

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..

Free wifi for customers? Sure. Do it like this...

[argent]

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 "for pay" wifi is a bust is that it's too damn hard to pay for it. There's a bookstore near my daughter's work with a hotspot... but to get on, you have to sign up ahead of time, get an account, with a credit card, it's almost as much hassle as getting cellphone service... and you have to do it again for each company doing wifi.

I realize that it'd be hard to hook it into the register, because those things are all proprietary one-offs, but how about an access point with a little receipt printer that sits on the counter next to the register with three buttons on it: "tall", "grande", and "day pass". When you buy a mocha latte you can ask for a wifi key, the barrista hits a button and you get a tall (30 minutes) or grande (90 minutes), and hands you the printout. Or you can buy a day pass for 10 bucks.

The figure is an example

[sjbe]

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 don't blame Starbucks for getting people to pay if they are willing to pay but they certainly can afford to provide it for free.

Re:The figure is an example

[Allador]

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 support.

So they'd have to build a whole internal department in their company to manage this, and it would end up being more like 3-5% of gross revenue.

For a big company, its not always acceptable just to setup a router & wap, wide open, and say 'have at it'.

You'll then have people get pissed off and leave when it doesnt work, plus you'll have customers bugging your staff about it, and they'll be trying to troubleshoot it.

It only takes a handful of questions a month to your staff about this before you've easily doubled your ISP fees in real costs.

Re:The figure is an example

[sjbe]

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

The biggest reason why a company like Starbucks wouldnt do it is because its not their core business. Which is why they outsourced it to T-Mobile and now AT&T.

So they'd have to build a whole internal department in their company to manage this, and it would end up being more like 3-5% of gross revenue. There is NO WAY a wifi rollout would cost Starbucks $282 million (3% of 2007 gross revenue - your numbers not mine) That would be $33,000 per store. There is no way they would get anywhere CLOSE to enough extra business to justify such an expense. That would be approximately half the annual profit of every store they own. Do the numbers before saying something so clearly wrong.

Re:The figure is an example

[Allador]

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 then they could have scale effects but that would be expensive. Benefiting from economies of scale requires big up front investment.

There is NO WAY a wifi rollout would cost Starbucks $282 million (3% of 2007 gross revenue - your numbers not mine) That would be $33,000 per store. You're right, my 3-5% of gross was offsetting hyperbole to your 1% of profit not being material.

Re:Does anyone actually Care

[Jesus_666]

News flash! The scope of nerdity is not limited solely to things that you "do".

Must resist... obvious... Slashdotter sex life... joke... Must... speak like... William Shatner...

Re:Does anyone actually Care

[ddrichardson]

What we have here is a Pringles can full of burnt coffee causing a failure to communicate.

Wait, that's not burnt coffee...

Re:Free wifi for customers? Sure. Do it like this.

[mabhatter654]

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.

Panera Bread Company and McDonalds

[John Murdoch]

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 uniformly consistent all across the country.

(We're developing a "routinely connected" application that we're deploying on sales reps' notebooks--so we're carefully watching Wi-Fi hotspot deployment. We *love* Panera Bread Company--if they'd give us an updated list of locations each month we'd publish it to our reps.)

John Murdoch

Re:Panera Bread Company and McDonalds

[Allador]

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.

Too good to be true?

[jgoemat]

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.

Re:Too good to be true?

[Allador]

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.

Re:Too good to be true?

[jgoemat]

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.

Ordering Cup of Joe at Starbucks YouTube Challenge

[Anonymous Coward]

> Maybe free access in exchange for buying a cup of joe every 30 days was too good to be true (this soon).

I dare you to walk up to a barista and in a macho voice go "I'd like a cup of Joe" please. Please have a friend get it on cell video and post on YouTube.

More on Corner Bakery vs Starbucks

[UnixUnix]

Corner Bakery's WiFi is not slow where I use it, and the coffee is OK (not to mention much less expensive than Starbucks, as they offer free refills). The only quaint thing is that they attempt to "block pornography", i.e. what they think might be pornography :)

I do not consider it proper nowadays to pay for WiFi at a coffeeshop -- your business ought to be enough. If I find myself at a Starbucks, now that the Safari User Agent trick no longer works :) I hook up my Blackberry and use it as a modem. So there!

Re:Free wifi for customers? Sure. Do it like this.

[argent]

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 missing it badly.

Another reason I've avoided Starbuck's

[Anonymous Coward]

Here in Boulder, almost every coffee shop offers free wifi. I can name at least 8 of them. People camp out at the tables all day while buying a drink or two, or three, or maybe a sandwich, or a pastry, and maybe a glass of wine... Starbuck's has still managed to attract some business (ignorant undergrads, from the looks of it). Also, it's a much smaller crowd: the free-wifi cafes are always completely full and there's almost always a line at the counter; the Starbuck's downtown seems to run at about 30% capacity from what I've seen (the one near campus does better), but I don't hang out there. Maybe they've finally met their match :)

$10 per day

[Tungbo]

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 would also improve the experiences of the other customers.