New Internet Pressure as McDonald's Wi-Fi Goes Free

McDonald's (MCD) announced last week that beginning in January, customers will no longer have to pay for wireless internet access. The move could put pressure on rival chains to do likewise -- especially Starbucks (SBUX).

Though the companies are rarely willing to acknowledge it, Starbucks and McDonald's have become fierce competitors since McDonald's started rolling out its McCafés and offering bargain espresso drinks nationwide. It was already absurd that Starbucks charged for wireless internet, given that the vast majority of independent coffee shops and smaller chains offer that service for free, along with cafe chains like Panera (PNRA), not to mention Barnes & Noble and Borders bookstores.

But given McDonald's ubiquity, its switch could have a bigger impact. Freelancers, students and others who tend to camp out in cafes will become less likely to pay for wi-fi as free access becomes the standard everywhere else. As someone put it on Slashdot, "anyone still charging for Wi-Fi is going to look foolish, if not downright greedy."

Rivals like Burger King (BKC) probably doesn't need to worry quite as much -- the majority of people seeking a quick burger can probably do without checking their email or surfing the web during their meal, and they're less likely to defect just because McDonald's has free wi-fi.