The announcement that Starbucks had chosen Google and Level 3 to provide upgraded WiFi to more than 7,000 coffee houses was eyebrow-lifting. Just last month, Techwire covered Google’s big charitable announcement that it was gifting the City of San Francisco with a $600,000 donation for a WiFi system for 31 San Francisco Parks. Now, Google expands its initiatives in the broadband access area with this Starbucks deal, promising ten to one hundred times the current WiFi speeds at the upgraded Starbucks sites. (Don’t get too excited about the 100X speeds, because only the Starbucks with Google Fiber like Kansas City will get those speeds.)
This is jolting news. Many of us thought it odd when Google first made its foray into Kansas City, building the first U.S. gigabit fiber system. After all, Google started as an Internet search and advertising company, not an infrastructure provider. Then Google surprised us again with announcements of new fiber initiatives in Provo and Austin, suggesting it is a pretty profitable business running a fiber system. Now, we see Google’s bold new expansion into the WiFi business with a key partnership with Level 3 of Broomfield, Colorado. Clearly, Google is passionate about how broadband speed matters and if no one else is going to step up to the plate, it will lead the way.
This initiative demonstrates that Starbucks understands that speeds matter when it comes to broadband offered to its customers. Current speeds at the Starbucks are powered by T1 lines and deliver speeds of about 1.5 megabits. When a bunch of your customers are streaming YouTube videos and viewing Instagram on their smartphones and tablets, that is not enough capacity. The upgraded equipment will deliver 5-10 megabits per second of speed, roughly equivalent to 4G LTE wireless service speeds. Level 3 will install and manage the high bandwidth connectivity and in-store routing and switching equipment. The WiFi system will support both store operations and retail customers’ use of the WiFi system to connect to the Internet. Level 3 is a network provider with one of the largest IP transit networks in the country. Level 3 is a Tier 1 Internet provider, meaning it connects directly to the backbone of the Internet.
Broadband access is given a boost too. Starbucks has 7,000 locations, in urban, suburban and areas rife with corporate offices. Starbucks abandoned the pay model for its WiFi a couple of years ago, and so Starbucks will offer free fast Internet access to multi-tasking coffee drinkers. This will be a big draw for businesspersons who need to quickly connect to pick up email or send messages. Further, for low income persons, they will be able to use a smart phone, tablet or laptop to connect to the Internet to check email, apply for a job online, or obtain critical health or government service information. Other users may include school age youth who lack Internet access at home and need to do some schoolwork requiring the Internet.
Finally, Starbucks said the Google deal wasn’t just about the connectivity but also about what Google had to offer for Starbuck’s branded Digital Network, the landing page customers see first as they use the Starbucks WiFi system. Starbucks has engaged its customers in unique ways involving music, news, local events, and other uber hip creative marketing. Google has been acquiring content and can offer Starbucks access to YouTube, Google Play and other unique offerings to make Starbucks landing page even more cool.
Other traditional Internet Service Providers are also adding WiFi hotspots that are free to use by their customers. As of January 2012, AT&T said they have 30,000 AT&T-operated WiFi hotspots, making 1.2 billion connections for users. Verizon Wireless has 5,000 WiFi hotspots available for its customers for free. Cable WiFi Internet Access brings 150,000 hotspots to Americans, with partners Comcast Cable, Time Warner Cable, Cox Cable, Brighthouse and Optimum participating. It’s all good folks. You can consume the X Factor and the Today Show while consuming your soy mocha latte.
