Left with the short end of the croissant, T-Mobile sues Starbucks

After Starbucks pleased its customers by announcing it will give away two hours of AT&T Wi-Fi access per day, former Wi-Fi partner T-Mobile took exception and has filed a lawsuit.

T-Mobile last week filed a lawsuit claiming Starbucks and AT&T colluded to offer free Internet to Starbucks customers, even though most Starbucks retail locations are relying on T-Mobile network infrastructure. That forces T-Mobile to bear the cost and burden of the free Internet offering, while reaping none of the benefit.

The free Wi-Fi promotion "violates T-Mobile's rights to exclusively sell, market and promote wireless Internet service within all but two markets of Starbucks' US stores," the carrier alleges, in its lawsuit filed in New York State Supreme Court.

Only stores in Bakersfield, California and San Antonio, Texas have fully transitioned from T-Mobile to AT&T hardware, with most retail outlets still under the T-Mobile exclusivity rights, according to the lawsuit.

Before announcing a new Wi-Fi deal with AT&T, Starbucks, and T-Mobile had a seven-year relationship where T-Mobile offered service for hourly or daily rates. AT&T and T-Mobile had reportedly been working together to ensure an easy transition. T-Mobile's service had already been rolled out in more than 7,000 Starbucks locations across the US.

The two companies had agreed that, until next January 4, Starbucks customers could still use T-Mobile service, though they would have to pay $3.99 per session or $20 for a monthly subscription. AT&T broadband consumers will have unlimited Wi-Fi access at each of the Starbucks locations, along with 70,000 other international hotspots.

T-Mobile believes the free Internet offering violates the deal all three companies agreed to earlier in the year.

"Starbucks and AT&T...secretly developed a promotional plan under which they would offer 'free' AT&T/Starbucks Wi-Fi even in stores" where T-Mobile's network infrastructure is used, giving AT&T an unfair advantage, the lawsuit also claims.

T-Mobile is seeking unspecified damages and for Starbucks to stop its free Internet service.

Coffee drinkers interested in the free two hours of Wi-Fi Internet access must purchase a prepaid Starbucks card with at least $5 credit or register online before a deadline of July 14.