One of the common complaints we heard in the early days of "free WiFi" in cafes, restaurants and libraries was the claim that people would "just use it to view porn." It seemed like an odd claim, because how many people really want to display to the world their porn viewing habits? There's a reason why porn magazines were delivered in brown paper wrappings. However, I'm sure that there will always be some people who do use it that way. Apparently some of them were at a Starbucks recently, and an exasperated barista decided the best response was to pull the plug on the WiFi -- an act for which he claims he was fired. Indeed. It does make you wonder why he didn't just ask them to stop surfing porn.

Way back in 2003, we explained why fee-based WiFi almost certainly did not make sense for coffee shops like Starbucks. A year later, we had a discussion on how the program could be a lot more successful if it went free. But, for years, Starbucks insisted that the paid WiFi was a success. Except, if you watched, it gradually got more and more "like free." And that's because few people were actually using the paid version. And, now, finally, after all of these years, Starbucks is finally going to completely free WiFi. It's finally admitting that WiFi was always a complementary service to get more people to buy its high margin goods -- rather than a product itself.

Back in February, Starbucks surprised an awful lot of people by signing up to use AT&T's WiFi offering, ending the exclusive deal it had for many, many years with T-Mobile (and Mobilestar before T-Mobile purchased that company). Part of the AT&T deal was that it would offer some amount of free WiFi -- something T-Mobile/Starbucks never did. There was some early confusion about the deal concerning whether T-Mobile would continue offering service and how the two services would overlap. It turns out that it wasn't just confusing to us reading about it -- it was confusing to T-Mobile as well.

T-Mobile has now sued Starbucks over the transition, saying that the company has gone well beyond what the two companies had agreed to. The original plan was that T-Mobile would gradually transition the network to AT&T, and the companies would work together to make sure things worked well for customers of each company. However, just recently, Starbucks pushed forward with the plan to offer some number of "free" WiFi hours to AT&T customers -- much to the annoyance of T-Mobile, who says most of the WiFi equipment in use is still T-Mobile's, and the company isn't getting paid at all for the free hours (an interesting question could be whether or not AT&T is getting paid for that usage).

Basically, the infrastructure transition has barely begun, and Starbucks is already acting as though it's complete, shifting over to the business model provided by AT&T, without having that work within the parameters of T-Mobile's model. While the legal result will almost certainly come down to contractual terms, the real issue may be that this suggests the promised "smooth transition" from T-Mobile to AT&T may not be very smooth at all. T-Mobile is going to have less and less incentive to make sure that the network really works all that well, especially if it feels that it's being cheated out of money for the use of its network.

For many years, Starbucks has provided a huge footprint for fee-based WiFi from T-Mobile (originally Mobilestar). While many, many others had determined that it made more sense to offer free WiFi in coffee shops and other places to attract users, Starbucks stuck by the relatively expensive T-Mobile WiFi offering. The deal was apparently somewhat (though not fantastically) profitable for both companies, which is why they never seemed to budge from it, even as the idea of fee-based WiFi lost a lot of its luster. However, it looks like things are finally shaking up a bit. Starbucks has now announced that it's also adding AT&T's hotspot offering to its stores, which is a pretty big deal, since AT&T offers access to its WiFi hotspots for free to most DSL customers. Prior to this, most of AT&T's hotspots were found in McDonalds -- so adding Starbucks is a big win.

It's interesting to note, however, that Starbucks hasn't dumped T-Mobile, it's just added AT&T. It's not clear if this means that Starbucks will be installing separate WiFi equipment for both services, but given the recent deal between Apple and Starbucks to let iPhone users access iTunes via WiFi for free, you had to figure that the company was going to be changing some of its WiFi backend equipment. Also given AT&T's iPhone connection, it shouldn't be a huge surprise that AT&T was a part of the new Starbucks offering. The other interesting bit is that for non-subscribers, the AT&T WiFi will be noticeably cheaper in one-off use than T-Mobile's -- meaning even if T-Mobile hasn't been "dumped" it may have just lost many one-time users. If anything, this may continue to push Starbucks to move closer and closer to finally giving up the paid solution and offering WiFi for free -- just as many Starbucks managers have been begging the company to do for years.

Apple refreshed its iPod line today, announcing the long-expected touchscreen iPod among other things. The event was pretty wide-ranging, with a lot to chew on. The biggest early news was the announcement that iPhone owners will be able to create ringtones from songs they've purchased from the iTunes Music Store... for an additional 99 cents on top of the cost of the downloaded track. Perhaps this is an attempt by Apple to throw a bone to disgruntled record companies, but it's likely to call attention to legions of mobile handsets other than the iPhone that will let user set MP3s and other types of audio files as ringtones for free. Apple also sliced the price of the 8GB iPhone by $200, to $399 -- indicating that demand has slowed as demand among diehard Mac fans and other early adopters has been filled. The price cut is probably also a reaction to the iPod Touch, which appears to be an iPhone without any phone, and a similar 8GB model of it has been priced at $299. This may prove to be an attractive alternative to the iPhone for many users, since it has a fairly similar feature set, outside cellular connectivity, including WiFi web browsing -- but comes at a lower upfront cost, plus without the need for a long-term contract with AT&T.

Perhaps the most curious announcement, though, was news of an Apple partnership with Starbucks. iPhone and iPod Touch users will eventually see an extra icon on their screen when they're within range of a WiFi-enabled Starbucks. The application it leads to will allow them to see what songs are playing in the store, and buy them from the iTMS, and they can also access the iTMS without having to pay usage fees for the hotspot. On the face of it, it's a pretty underwhelming offering, just like all of Starbucks' previous attempts at digital music downloads, and the fact that Steve Jobs claimed Apple had been working on it for two years is hardly reassuring. Despite Jobs' contention that the service is "very cool", it's hard to see it selling more iPods, or making much money on its own.