MobileStar pulls out of Starbucks wireless network
"A latte grande with skim milk, extra foam. Hold the Internet access."
 
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MobileStar Network has pulled the plug on its high-speed wireless network, leaving some hotel and retail chains, such as Starbucks Coffee, without their highly touted public access connections.
Most of its 90 or so employees have been laid off, and inquiries are being referred to Diablo Management Group, a San Ramon, Calif., management and advisory firm for companies seeking bankruptcy or turnaround.
According to one wire service account, an arrangement to continue the company's operation, presumably with an infusion of new funds, collapsed at the last minute.
The Starbucks contract, announced just a few months ago, was the biggest deal ever for the Richardson, Texas, network operator. Each Starbucks store was to have an IEEE 802.11b wireless LAN, linked via a T-1 line to Mobilestar's backbone. Starbucks customers with a computer fitted with an IEEE 802.11b wireless card would have a choice of two payment options: a monthly plan starting at $15.95 for 200 minutes per month, or a pay-as-you-go plan for 20 cents per minute.
As of June 2001, about 350 Starbucks shops had been tied into the MobileStar backbone.
MobileStar was founded in 1996, intending to create a web of wireless access points in hotels, airports, conference centers, restaurants and other public sites. Through these wireless links, consumers and business travelers would be able to access the Internet and corporate intranets at near-T-1 speeds. Investors included Mayfield Fund, Blueprint Ventures, Norwest Venture Partners, Sienna Ventures, and Texas Pacific Group.
Starbucks is vowing to continue wireless service, according to published reports.
"Starbucks hopes that any interruption will be brief and is working on alternatives to continue providing wireless service to its customers. Despite any interruption, Starbucks is still committed to offering customers wireless Internet access within its retail locations," a spokesperson said in a prepared statement.
The Starbucks deal was seen by some as evidence of the expansion of wireless networking into "public" access nets. Customers could subscribe to a wireless ISP or a company acting as a middleman for several ISPs, and then use the ISP's wireless links in the hotels, shops, restaurants and airports that contracted with the same ISP.
Other MobileStar customers included American Airlines Admirals Clubs, Hilton Hotels, and Columbia Sussex Hotels.
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