Two years ago, when CEO Howard Schultz uttered the words “Starbucks” and “Internet” in the same breath, his company’s stock dropped 25 percent, and he quickly backpedaled. The coffee brewer’s latest venture in cyberspace, announced in January 2001 and soft launched starting in late May, avoids a scalding by shouting “partnership” and whispering “Internet.”
I’ve been waiting with decaf-americano-tinged breath for the appearance of this promised new, high-speed wireless network that Starbucks is installing—excuse me, partnering with a Texas firm, MobileStar Network Corp., to install. The network will eventually appear in most of Starbucks’s North American outlets, ultimately reaching 4,000 stores over the next two years. (At the rate Starbucks is opening stores, the company should have 5,000 to 6,000 outlets by that time.) Compaq and Microsoft also have their stirrers in the mocha, mixing in equipment and content.
But Starbucks kept mum before and during the soft launch, revealing only that Seattle, Dallas, and San Francisco would be the first cities to be “unwired”; signals started appearing in the oddly under-unwired New York City in June as well. In recent weeks, I and fellow obsessed enthusiasts of wireless networks have dowsed for signal while wiping the foam off our lips, and tried to worm information out of baristas.
In the BS (before-Starbucks) era, MobileStar used the OpenAir standard, compatible with HomeRF 1.0; it continues to operate this flavor in many of the hotels it offers service through. But nothing less than 802.11b will suffice for Starbucks’s customers, who on average, according to the company, are high-earning technology sophisticates.
Suddenly, everyone’s doing it
More and more public places are unwiring, including the Seattle-Tacoma International Airport (Seatac) and other airports, restaurants, and conference centers. San Francisco-based Surf and Sip has specialized in finding independent outlets near dense retail hubs to take advantage of Wi-Fi’s range: at one intersection in Russian Hill in San Francisco, you can sit at Starbucks, Tully’s, or Royal Grounds and still easily reach a Surf and Sip hotspot in a nearby bar. Tenzing Communications here in Seattle is even testing Wi-Fi networks for in-flight use.
Many self-employed folk, telecommuters, and road warriors find themselves away from the bandwidth hose at which they love to imbibe, and have to change behavior and become much less efficient when handling routine email, accessing company resources, or simply playing networked Doom.
With Wi-Fi, the network can be everywhere. Waiting for a plane, sucking some joe, sitting in the park: Okay, maybe you don’t have to work all the time. But the combination of high-speed, wireless, and everywhere offers control over the time and place of your work and play.
Road warriors should find ubiquitous high-speed networks a godsend, as they often have to displace or ignore tasks that they could perform during truly wasted time at an airport or hotel. Without the high-speed service, they displace their work to less convenient times when they return home over a weekend, or via a low-speed dial-up from a hotel room late at night. (On the other hand, expectations of productivity could increase, too.)
Slow, silent rollout
Starbucks finally let down its guard at a trendy part of Seattle, on a site it took over from Boston Market, ni Chicken. Hopefully, this coincidence isn’t an omen. Mike Daisey, the solo performer behind the recently closed-in-Seattle and now-touring 21 Dog Years: Doing Time @ Amazon.com, knew of my idie fixe. He uses an AirPort-equipped Apple Titanium PowerBook as part of his performance and his home wireless network, and himself trolls for Wi-Fi networks.
He wrote back in late May, “Please be aware that the Starbucks on E. John on Capitol Hill has Airport enabled and running—I’m sending this from there.” I later checked out the same outlet and was allowed to pay about $6.50 for 30 minutes of access ($2.95 for the first 15 minutes and 20 cents a minute after that).
A Starbucks spokesperson politely deflected requests in late May for elaboration or timetables. Starbucks has continued to keep its guard up in the interim.
When I spoke in late May to MobileStar’s chief technology officer, Ali Tabassi, he said that about 300 outlets were ready to roll in Seattle, San Francisco, and Dallas. Houston and New York were next. All five cities now have live, for-fee access.
The company’s site notes that the current roster includes 500 stores, with plans to open next in Atlanta, Chicago, Boston, and the Washington, DC Metro area.
Bill of fare
MobileStar charges a variable rate based on usage. The demitasse sampler (Pulsar Plan) costs $2.95 per use for 15 minutes, and 20 cents each additional minute. Other plans include:
- Local usage: Local Galaxy Plan, $29.95/month, unlimited local minutes in a region (such as Seattle, or San Francisco Bay Area); 15 cents a minute outside the area
- Minimal usage: Star Plan 200, $15.95/month, 200 minutes, 10 cents/additional minutes.
- Moderate usage: Star Plan 500, $34.95/month, 500 minutes, 8 cents/additional minutes.
- Unlimited national: National Galaxy Plan, $59.95/month.
All plans limit users to 500 Mb of data transfer per month; megabytes over that are billed at 25 cents a megabyte, which works out to $250 per additional gigabyte. The service doesn’t appear to yet offer a mid-month monitor of megabytes gone by.
The monthly plans all require a one-year commitment, without an explanation of penalties on cancellation. Using the service in an airport adds a buck in each 24-hour period regardless of plan. Because MobileStar doesn’t offer Wi-Fi in hotels yet, it’s unclear what the pricing will be there. Wayport, one of the company’s closest competitors, charges about $10.00 for a 24-hour “session” in a hotel.
Building out the brand
An interesting financial sidenote: MobileStar is paying for the network out of its own pocket. Starbucks’s CEO Schultz said in an interview on March 12 with CBS Marketwatch, “There is an expense attached to it, but not for us.” MobileStar confirmed this arrangement. Tabassi said, “MobileStar is building out the network at our own expense, and we are operating the network. We are associating ourselves with the brand name.”
MobileStar and Starbucks have said the network will be entirely composed of T-1 lines, which offer 1.544 Mbps. I estimate the expense at tens of millions of dollars for build-out, and millions a year for support and access: that’s a lot of accounts to sell to recoup costs.
Many news sources misreported that Compaq itself was displacing MobileStar as the wireless provider. Starbucks may have added to the confusion by their characterization of Compaq, which a Starbucks spokesperson described in a series of buzzwords as the “preferred information technology provider for our retail stores and our headquarters.”
Compaq spokesperson Dayna Fried explained that while MobileStar would offer the network, Compaq’s would be providing computers and handhelds via a contract valued at $100 million over five years. Fried said that the in-store details have yet to be finalized, but could include rental, sale, or free use of the computer maker’s iPaq PocketPC handheld with wireless access. Compaq may also make wireless cards and related technology available for sale in the stores.
We may all work too much already, but veteran road warriors already report to me that their lives are simplified. This may be one technology that actually restores time in people’s days by extending the Internet seamlessly. Starbucks is leading a quiet revolution that comprises hundreds of thousands of little wireless networks that may be on the verge of becoming one giant web.
You can view a list of which outlets are or will become accessible by visiting MobileStar’s Starbucks page at http://www.mobilestar.com/starbucks_update.asp. For more on 802.11b, visit Glenn’s Web log at 80211b.weblogger.com.
Glenn Fleishman is a freelance technology journalist who contributes regularly to Wired and Fortune, and writes the Practical Macintosh columnfor the Seattle Times.
This article appeared in somewhat shorter and less detailed form in The Seattle Weekly in May 2001. It appears here by permission of the author.
