Starbucks ditches AT&T for Google's free Wi-Fi

Starbucks announced a deal with Google (NASDAQ:GOOG) to offer free Wi-Fi service in all of its U.S. stores that the companies said will be up to 10 times faster than the current service offered by AT&T Mobility (NYSE:T), which has been powering Starbucks' Wi-Fi for more than five years.

Google said it will offer free Wi-Fi to all 7,000 company-operated Starbucks stores in the United States over the next 18 months. In cities where Google offers its Google Fiber Internet service (Kansas City, Mo. and Kansas City, Kan., and soon Austin, Texas; and Provo, Utah), Google said the service will be up to 100 times faster than the current AT&T-powered Wi-Fi offerings. Level 3 Communications will work with Google and Starbucks on the effort and will upgrade existing Wi-Fi gear and manage in-store connectivity.

A Starbucks representative said the coffee-maker will continue to work with AT&T during the transition period, according to Dow Jones Newswires. "This is obviously an important milestone in our relationship with Google," Starbucks' chief digital officer, Adam Brotman, told CNET. "We do hope this is one step amongst many that we can continue to build upon what's already a great partnership with Google."

Starbucks stores currently use T1 lines for 1.5 Mbps speeds, according to CNET, and while Google and Starbucks say the service will be up to 10 times faster than that, actual performance will vary from store to store, with some faster than that and some slower.

Brotman told CNET that Starbucks wasn't necessarily looking to move away from AT&T, but that it has been in constant contact with Google on potential partnerships, and that this one made sense. For Starbucks, this is the biggest shakeup in its Wi-Fi efforts since July 2010, when it started offering unlimited free Wi-Fi access at all of its company-operated stores. AT&T scored a coup in February 2008 when it won the business from T-Mobile US (NYSE:TMUS).

"Starbucks continues to be an important customer for us and we continue to provide them with a variety of services over AT&T's advanced networks, including the nation's fastest, most reliable 4G LTE network," an AT&T spokesperson said in a statement.

For Google, the deal is another indication that it wants to get more heavily involved in providing consumers with Internet access--which the company has said ultimately leads to more usage of its services and the sale of more ads. In addition to the company's Fiber initiative, Google has launched Project Loon, which is designed to bring airborne broadband service to rural and remote areas via balloons and ground-based cell towers. That project is still getting off the ground, but Google contends that, via Project Loon, it is feasible to deploy a ring of radio-equipped balloons to fly around the globe on stratospheric winds 12 miles above the earth and deliver Internet access at 3G or better speeds.

For more:
- see this Google blog post
- see this Dow Jones Newswires article (sub. req.)
- see this CNET article
- see this VentureBeat article

Related Articles:
Political issues, spying concerns could drag at Google's Project Loon
Google contends Project Loon, balloon-powered broadband, is crazy enough to work
Starbucks to offer free Wi-Fi service
Starbucks snubs T-Mobile, signs Wi-Fi deal with AT&T

Article updated July 31 at 4:30 p.m. ET to include a statement from AT&T.

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