MobileStar

» see mobilestar.com as it lived, on the wayback machine

~ the goodbye ~

When MobileStar switched off in October 2001 there was no Starbucks in Turkey at all. The first one opened in Istanbul in April 2003, and Ankara did not get one until the year after that. The product died about eighteen months before the room it lived in reached my country, and closer to three years before it reached my city.

MobileStar Network started in 1998 in Richardson, Texas, run by Mark Goode and Greg Jackson. Goode is generally credited with coining the word hotspot for a public wireless access point, which makes this a dead company that left behind a word everyone still uses without knowing where it came from. The first deployments ran on frequency-hopping gear from Proxim. Once 802.11b settled as a standard the company rebuilt on Cisco equipment.

The customer was the business traveler. MobileStar put access points in the places that person waited: Hilton hotels and the American Airlines Admirals Clubs, then airport terminals. Mayfield Fund and Blueprint Ventures put $38 million into the second round. By 2001 there were roughly 650 live locations on the network.

Paying by the hour for internet in a public room was not a foreign idea in Turkey in 2001. That was the entire internet cafe business, and I spent a lot of 2002 through 2005 in those rooms. The difference is that the Turkish version rented you a wired machine that belonged to the cafe. MobileStar sold you a signal and nothing else, so you had to already own a laptop with an 802.11b card in it before you could buy anything at all. In 2001 that was a small group of people anywhere in the world, and in Ankara it was close to nobody.

~ the chronicle ~

~ the starbucks deal ~

MobileStar signed Starbucks in January 2001 and the public announcement came that May, with Compaq supplying the hardware side and Microsoft on the software. The plan covered all 3,000 North American stores. The first phase was supposed to light up that summer in a handful of cities including Dallas and Seattle.

Every store needed a wire before it could sell anything wireless. Ken Dulaney at Gartner put the cost at around $400 a month for a T1 line into each Starbucks, which comes out at $1.2 million a month if the full 3,000 ever came online. The regional unlimited plan was priced at $20 a month. Nobody needed a spreadsheet to see the shape of that.

~ the postmortem ~

Two things arrived in the same season. The private equity market shut in the middle of 2001, so the next funding round was not there to be raised. Then September 11 removed business travel, which was the only customer segment MobileStar had ever targeted. The service was effectively dead from 9 October. The Richardson offices closed, and Starbucks spent that week telling reporters it had not received a bankruptcy notice while it looked for a replacement provider.

VoiceStream Wireless, by then owned by Deutsche Telekom, bought most of the equipment and the contracts in November for an undisclosed sum, subject to bankruptcy court approval. It had been quietly funding MobileStar in the weeks before that, which is why the network survived the collapse physically intact.

~ the inheritance ~

By February 2002 the same access points were running as T-Mobile Broadband. In August 2002 the service launched properly as T-Mobile HotSpot, and for the next six years the Wi-Fi in an American Starbucks was T-Mobile's. AT&T took the contract in 2008. The network MobileStar spent itself to death building outlived the company by years, under two other owners' names.

The word survived better than any of it. Hotspot is ordinary vocabulary now, printed on hotel key cards and buried three levels down in phone settings menus. It came out of a Texas startup that went broke running phone lines into coffee shops for a laptop-owning audience that did not exist yet.

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