T-Mobile roasts Starbucks over AT&T deal

T-Mobile claims that Starbucks violated an exclusive wireless internet access agreement

T-Mobile is taking Starbucks to court claiming that the coffee giant violated an exclusive agreement over provision of wireless internet access in its outlets.

The lawsuit, filed late last week in a New York State court, alleges that Starbucks and its new partner AT&T have "created a 'Free Wi-Fi Promotion' that violates T-Mobile's rights to exclusively sell, market and promote wireless internet service within all but two markets of Starbucks' US stores".

Earlier in the year the three companies signed an agreement to "transition from T-Mobile to AT&T for the provision of Wi-Fi services in Starbucks stores".

As part of the agreement Starbucks stores were to be "converted on a market-by-market basis, through the removal of T-Mobile access lines and equipment". After that AT&T could install its own equipment.

However, until an entire market is transitioned, T-Mobile "had the exclusive right to market and sell those services in the Starbucks stores within that market".

According to T-Mobile, only two markets have been fully transitioned, namely San Antonio in Texas and Bakersfield in California.

Flying in the face of this agreement, T-Mobile has accused Starbucks and AT &T of secretly developing "a promotional plan under which they would offer 'free' AT&T/Starbucks Wi-Fi even in stores in non-transitioned markets".

It is alleged that Starbucks planned to sell AT&T-branded cards which, once registered, would give users internet access via Wi-Fi in any Starbucks store, including those still managed by T-Mobile.

As well as breaking the agreement, T-Mobile points out that in the stores where its infrastructure is still in place, it is the one "bearing the cost and burden associated with this 'free' Wi-Fi offer".

T-Mobile is seeking unspecified damages for breach of contract and unfair competition against Starbucks as well as lawyers fees and a discharge from all obligations and duties pertaining to the agreement.