The Technophilez

T-Mobile USA is suing Starbucks, accusing the coffee behemoth of a breach of contract by allowing AT&T to provide customers with free Wi-Fi access in its cafes.
In a complaint filed Thursday in New York State Supreme Court in Manhattan, T-Mobile says Starbucks "secretly" developed a plan with AT&T to provide Wi-Fi at its cafes, despite an exclusive partnership with T-Mobile. T-Mobile, which is seeking unspecified damages, alleges the companies broke an agreement over how Starbucks should transition the service from T-Mobile to AT&T, according to Reuters.
T-Mobile said that, under the agreement, it had the exclusive right to "sell, market, and promote" its services in Starbucks up until the stores were completely transitioned to AT&T's system, according to the lawsuit. T-Mobile says it is currently bearing the brunt of the cost of the service because it is providing the technology and equipment in all but two of Starbucks' U.S. markets--the San Antonio, Texas, and Bakersfield, California, markets.
In February, Starbucks ended its seven-year partnership with T-Mobile in favor of an agreement with AT&T. Under the old partnership with T-Mobile, customers would sign up for Wi-Fi for hourly and daily rates.

Under the new partnership, Starbucks in June began offering two hours of free Wi-Fi Internet service via AT&T to customers who purchase a Starbucks Reward Card with a minimum $5 credit on it. To keep the card active, customers must use their Starbucks Card at least once a month. New members of the service also get a voucher for a free drink

Bidding remained stalled Tuesday on a key piece of spectrum in the U.S. government's wireless airwaves auction, prompting concern regulators will have to modify rules requiring some of it be shared with public safety agencies.

After 12 rounds of bidding over four days, the Federal Communications Commission still has received only one bid for a portion of the 700-megahertz airwaves known as the "D" block, that could also be used by police, firefighters and other public safety officials.

Top bids for all five spectrum blocks on offer reached nearly $8.66 billion on Tuesday. The auction is widely expected to net the federal government at least $10 billion.

The lone $472 million bid for the D block spectrum, which came in the first round of the auction last Thursday, is far below the $1.3 billion minimum price set by the FCC.

Rep. Edward Markey, chairman of the House Subcommittee on the Internet and Telecommunications, told a hearing on Tuesday that the lagging interest in the D block was "discouraging."

A lack of bidders for the D block could be a reflection of the credit crunch that has hurt the ability of companies to raise capital, according to industry analysts.

Under rules adopted by the FCC, the winner of the D block airwaves will be required to negotiate an agreement with public safety agencies, build out a nationwide network and then give those agencies priority use during emergencies.

If no bidder meets the minimum price for the D block, the FCC can re-auction that piece of the spectrum and possibly modify the requirements.

AT&T Inc. said Wednesday it will make its 10,000 Wi-Fi hotspots free to nearly all of its broadband Internet customers starting early next week.

Only subscribers to AT&T's premium broadband services previously had free access to its hotspots, leaving out the majority of high-speed users, who have the 1.5-Mbps service.

Now, more than 10 million broadband customers, most of AT&T's high-speed Internet subscribers, will be able to use the hotspots free of charge.

"It's a differentiator for us when people are choosing between competitors," said AT&T spokesman Fletcher Cook.

Most Wi-Fi hotspots — in restaurants, airports and other public places — charge daily or monthly fees for access.

AT&T wireless customers who use Apple Inc.'s iPhone currently must get a Wi-Fi package to use their iPhone at AT&T hotspots, but they now can use their iPhones at hotspots for free if they are AT&T broadband Internet subscribers.

San Antonio-based AT&T also said Wednesday that it will introduce a faster broadband service that can send data at up to 10 Mbps. The service, at $55 per month, will be available only to customers of its Internet Protocol-based television service, U-verse.

Demand for such high speeds still comes from a relatively small segment of the overall broadband market, in part because actual Internet speeds depend on a host of variables ranging from an individual Web site's server to the flow of data on various networks.

Faster broadband services are most favored by customers who download movies and music or share a lot of photos over the Internet, all of which require heavy amounts of data to move across the network.

LAS VEGAS - With just a few months to go before the launch of its next-generation wireless network, Sprint Nextel Corp. has a distinctly modest lineup of compatible devices.

At the International Consumer Electronics Show here this week, Sprint showed only two computer modems that will definitely be available in April, when its WiMax network becomes available outside current trials in Chicago, Baltimore and Washington.

One of the promises of WiMax, a service Sprint will be providing under the Xohm brand, is that receivers for it can be built into a variety of devices like cameras and Web tablets that usually don't have a built-in Internet connection or rely on Wi-Fi, a short-range technology.

"We fully expect an explosion of consumer devices," said Antone Porter, a product manager at Sprint.

The relative dearth of early WiMax gadgets isn't necessarily a sign of trouble for Sprint. Gemma Tedesco, an analyst at In-Stat, said the coverage area will be relatively small this year anyway, and Sprint's main task will be to build out the network.

"Unlike Wi-Fi, users' satisfaction will be dependent on the network coverage, and so Sprint really needs to have their metro areas well covered, to get users motivated; even this may take time, going into 2009 and beyond," she said.

Unlike Wi-Fi, WiMax signals reach for miles, and unlike cellular broadband, it's designed from the ground up for data. That could make WiMax cheaper than current cellular broadband, or 3G, which often costs around $60 a month for laptops.

Sprint hasn't disclosed pricing plans, but Atish Gude, senior vice president of mobile broadband operations at the company, said he suspects "it will be more affordable than 3G."

At launch, the two devices that will be able to connect to the network are a modem for homes or small-offices from ZyXEL Communications Corp. and a laptop modem from ZTE Corp.

The home modem resembles a huge coffee mug, with two antennas that look like handles. It's intended to make WiMax an alternative to wired broadband provided by phone and cable companies. In addition to providing Internet connectivity, it will have jacks for phone service to be provided over WiMax.

The first gadget to come with built-in WiMax capability may be a new model of the EeePC, a diminutive laptop from ASUSTek Computer. The Taiwanese company started selling a version of the cheap computer without WiMax in the fourth quarter of last year and has sold 350,000 globally, Chief Executive Jonney Shih said.

An Eee with built-in WiMax will be available in the second quarter, Shih said. A price has not been decided. The current Eee uses Linux, a free operating system, but it will be possible to use Microsoft Corp.'s Windows XP on future models, Shih said.

ASUS is also planning to build WiMax into full-size laptops, to be available in the second half of the year, with prices starting at $999.

San Francisco-based OQO Inc. demonstrated at the show a WiMax-equipped prototype of its small handheld Windows computer with slide-out keyboard. But the company did not say when or even if it would be commercially available. OQO already has models compatible with competing cellular broadband networks.

Finland's Nokia Corp., which is supplying Sprint with WiMax network equipment, has said it will build Intel Corp.'s WiMax chips into a Web tablet model in 2008 but hasn't said when.

The backing of Intel means several big-name laptop makers, like Toshiba Corp. and Lenovo, have committed to making WiMax-equipped models, but no details have emerged.

"A lot of times the first year of a technology's rollout is kind of experimental and bumpy — even with the various flavors of Wi-Fi this has happened, and WiMax is much more complicated," said Tedesco, the In-Stat analyst.

Tedesco said the fact that ZyXEL, a "high-volume, low-end networking equipment vendor," is entering the market will push other companies like D-Link, Belkin and Netgear to also make WiMax gear.

A small South Carolina company says it has a cure for the modern plague of budget-busting cell-phone charges racked up by teenagers: a gadget for text-messaging that isn't a cell phone.

Zipit Wireless Inc. plans to announce Tuesday that it will make available a text-messaging plan for its Zipit Wireless Messenger 2, a device the size of fat wallet that uses Wi-Fi hotspots to do free instant messaging with AOL Instant Messenger, Yahoo Messenger and Windows Live Messenger.

Zipit users who sign up for a text-messaging plan will now be able to contact cell-phone users, as well as communicate by instant message.

The plan will cost $4.99 for up to 3,000 messages per month when it formally launches in February. Between Dec. 20 and the launch, text messaging is free on the device.

Cell-phone carriers typically charge 10 or 15 cents per text message, or $15 a month to add 1,500 or "unlimited" text messages to a calling plan. The service costs almost nothing to provide, making it "one of the most profitable applications known to man," according to Morgan Stanley's telecommunications analyst, Simon Flannery.

The Zipit 2 itself costs $149.99. It has a color screen and launched in November as a follow-up to the monochrome original Zipit, which came out in 2004.

The Zipit 2 will be able to receive as well as send text messages. But unlike a cell phone, the Zipit won't accept text messages from numbers that haven't been added to an approved list by the user, which should make it immune to spam sent as text messages. Also unlike a cell phone, it won't be able to send text messages to more than one recipient at a time.

The Zipit belongs to a small category of devices that have attempted to capitalize on the craze for instant messaging by making it available off the computer. Sony Corp.'s Mylo device, which was aimed at the college-aged, is another example.

Neither the Zipit nor the Mylo has found audiences as big as instant messaging has generally. Frank Greer, chief executive of Greenville, S.C.-based Zipit Wireless, said "tens of thousands" of the original Zipit have sold, though he would not give sales figures.

The relatively slow pace of sales probably is due to the difficulty of marketing a wireless messaging device to people who already have one — the cell phone. Both the Zipit and the Mylo also need to be in a Wi-Fi hotspot to function.

But Zipit 2's text-messaging feature — which can be added through a downloaded software update — will help close the gap with cell phones.

The original Zipit is not upgradeable.

The PC version of AOL Instant Messenger already allows text messaging to cell-phone users, who can also reply to the AIM user.