Monday, June 09, 2008

T-Mobile Sues Starbucks Over ATT Wi-Fi Deal

T-Mobile is upset over the fact that Starbucks and ATT are using their equipment to offer free Wi-Fi service to their customers. So T-Mobile is suing Starbucks Corp., accusing the coffee house operator of breaching a contract by allowing AT&T to provide customers with free Wi-Fi access using T-Mobile equipment.

T-Mobile USA alleges AT&T and Starbucks are not living up to an original agreement over how Starbucks should transfer from its T-Mobile USA relationship to a new partnership with AT&T. T-Mobile USA is seeking unspecified damages because of what it called Starbucks' willful breach of contract and unfair competition.

T-Mobile claims to have exclusive rights to market, offer and sell Wi-Fi services in Starbucks locations until all the stores in the given market are fully converted to AT&T. T-Mobile said Bakersfield, Calif. and San Antonio, Texas., are the only markets that have fully been fully converted, while the vast majority of cafes are still using T-Mobile networking equipment meaning they remain subject to T-Mobile's exclusivity rights, according to the lawsuit.

"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," the lawsuit said.

In the 13-page lawsuit filed late last Thursday in New York state court T- Mobile alleged that Starbucks used its equipment and technology while secretly developing a plan with AT&T to provide free Wi-Fi service.

"Since T-Mobile provides resources and equipment to support Wi-Fi service in non-transitioned stores, it is T-Mobile alone that is bearing the cost and burden associated with this 'free' Wi-Fi offer," the lawsuit said.

Last February Geek-News.Net reported that Starbucks was ending its partnership with T-Mobile in favor of an agreement with AT&T. Starbucks previously teamed with T-Mobile to provide Wi-Fi access to its customers at a rate of $6 for the first hour and then 10 cents per minute.

Recently AT&T and Starbucks announced they'd be offering two hours of free Wi-Fi Internet service to customers who have at least $5 on their Starbucks cards. For a short time they also offered free Wi-Fi to iPhone customers , a deal that might still be in the works.

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