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Indie coffeehouses tell Starbucks: Bring on your free Wi-Fi

February 14, 2008 12:00 PM ET

Active Comments
greg says: Wonder where the author of this article got the idea that travelers are used to $10-day charge for wifi in...
Anonymous says: It say a '13 year manager' not a '13 year old manager.'...


But that didn't happen after Ladro's 12 Seattle area cafes switched to free Wi-Fi several years ago. Nowadays, "we don't even care if you sit in the parking lot and use it," Kelley said.

Asked about the impact of Starbucks' move on his business, Kelley retorted, "Wi-Fi is free everywhere these days. Isn't Starbucks a little behind the times?"

In fact, some firms still make a tidy business selling Wi-Fi access. Take Boingo Wireless Inc., which charges $39 per month for access to 100,000 hot spots worldwide.

That remains competitive, especially to traveling businesspeople who are used to paying $10 a day in their hotel rooms.

But many regional or national coffee chains competing with Starbucks already offer free Wi-Fi, or are moving in that direction.

Minneapolis-based Caribou Coffee, reportedly the second-largest coffee chain nationwide with about 500 stores, automatically grants one free hour of Wi-Fi to any patron. When that expires, customers buy something more than $1.50 to get an access code granting unlimited usage the rest of the day.

Fellow Minneapolis chain Dunn Brothers offers free Wi-Fi with no strings attached at its 90 locations. Similarly, Seattle-based Tully's offers totally free Wi-Fi at about 80 out of its 150 stores.

Emeryville, Calif.-based Peet's Coffee & Tea Inc. will begin testing Wi-Fi at several stores starting next month, according to CIO Tom Cullen. If successful, Peet's will roll out free Wi-Fi at all of its 150 stores. No schedule has been set.

Los Angeles-based The Coffee Bean & Tea Leaf did not return a request for comment. Through a deal with AT&T, it has offered Wi-Fi at about 150 stores for several years, though it costs $3.99 for two hours, even for subscribers. Some Coffee Bean locations, however, appear on JiWire to be free.

Who's picking up the tab?

As pressure mounts to make more Wi-Fi hot spots free, some operators are turning to Web advertising to offset costs or make money. Those ads are delivered during log-in or at the user's landing page.

JiWire serves up ads to more than 8 million users per month on various Wi-Fi networks, including Boingo, Blumenfeld said, at rates far higher than ones on typical Web pages.

That kind of advertising "sounds gross" to Ladro's Kelley, though.

"It's just like all of those ads in the movie theatre," he said. "I say, enough is enough."

That's fine, said Blumenfeld, who thinks that most independent cafes, even those relying heavily on free Wi-Fi to attract customers during the slower afternoon and evening hours, will continue to do fine.

"Many patrons of the smaller coffeehouses will continue to support their local shop due to loyalty, unique surroundings versus corporate giant, community support, convenience of location, etc.," he said. "Any customer losses may also be offset simply because there continues to be so much more demand for Wi-Fi access in general."

Bauhaus' Heinze seconds that.

"We're close to two colleges, and we are in a neighborhood with a lot of apartment buildings," she said. Despite competing in Starbucks' backyard, Bauhaus, according to Heinze, has never "done anything reactive. And isn't that the whole point of being an indie coffeehouse, being your own self? If that happens to be similar to what Starbucks does, that's fine."

Read more about mobile and wireless in Computerworld's Mobile and Wireless Knowledge Center.



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