Why Are Carriers So Scared of Tethering?

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Android-powered smartphones have had the ability to share their Internet with other devices for quite some time now. This process is generally referred to as “tethering”.

I regularly tether other devices through my T-Mobile G2, mostly iPads and iPhones stuck on EDGE, but I’ve even tethered a group of laptops that were having slow data-speeds over their Sprint data cards. A few times I’ve even tethered my own laptop when I wasn’t in range of a Wi-Fi bubble but needed to get an article written for pocketnow ASAP. I don’t do it often, and the additional data I use is marginal. If anything T-Mobile benefits from me temporarily allowing other devices to tether through my phone; when people ask me how I do it, I tell them that my Android can do lots of cool things, and T-Mobile’s network is usually very fast.

A few of the big carriers initially disabled this feature to “protect their data network” from what they predicted would be an onslaught of data usage. Ironically, the same carriers offer data plans for laptops and other devices which seems to imply that their networks are capable of data traffic from “higher usage devices”.

Ironically, tethering a laptop to a smartphone isn’t notably different than connecting a wireless modem to a laptop. Additionally, it requires less over-head on the part of the carrier (who only has to bill and maintain one device, rather than two), and data is more efficiently used when the two devices are tethered than when they’re used separately. So why the hesitation to allow tethering?

Although no carriers have officially gone on the record, it’s assumed that the reason behind the prohibition was two-fold.

First, up until recently, many carriers offered “unlimited” data plans. Most people use less than 500MB/month. Heavy users, like me, use around 2GB/month. When users tether, that usage can double — quickly. To cover the additional costs — and to dissuade over-use — carriers want you to sign up for either a separate data plan, or a tethering plan. AT&T, for example, charges an extra fee to be able to tether a separate device through the data plan that you’re already paying for on your smartphone. This fee doesn’t give you any extra bandwidth allotment, it just buys you the privilege of connecting another device through your phone — all the data used counts against your data limit.

Second, carriers have had a hard time distinguishing smartphone data from tethered-device data. Since they couldn’t bill you more for the latter they simply removed the ability to tether.

Of course what that led to was entirely predictable: people developed apps to replace the missing functionality. One such app is called PdaNet which has an advantage over similar apps in that it doesn’t require a rooted phone (although it does require client software to be installed on the tethering computer). We’ll come back to PdaNet in a minute.

Most carriers eventually brought back the native ability to tether, but only because they figured out how to distinguish smartphone data from tethered-device data. In the case of one carrier, after detecting the tethered usage, they automatically “upgraded” you to their tethering plan — how nice of them.

Again, developers responded. This time with apps that could somehow make tethered-device data indistinguishable from smartphone data. PdaNet 3.0 was one of those apps. What would carriers do in response to that? In the U.S.A., all the major carriers (except Sprint) have now had Google block PdaNet (and similar apps) from being installable on their devices from the Android Market (read more about that here).

Carriers and developers will inevitably keep playing this game of leapfrog, but let’s fast-forward to one possible outcome…

An unlimited voice and texting plan with at least 2GB/month of data will run you anywhere from $70 to $120/month in the U.S.A. A 2GB/month or unlimited data-only plan costs around $50 to $80/month. What’s stopping users from cancelling their “all-in-one” plans and switching to a data-only plan?

Think about it. Google Voice and other services offer data-based texting. Most carriers have a text-to-email gateway so you don’t even need to send/receive true SMS texts, you can send emails which resolve as texts on other phones.

Voice is the real trick — Android has a built-in VoIP stack, but virtually nobody uses it. As soon as that process becomes as easy to set up as a “regular” voice carrier, watch out!

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About The Author
Joe Levi
Joe graduated from Weber State University with two degrees in Information Systems and Technologies. He has carried mobile devices with him for more than a decade, including Apple's Newton, Microsoft's Handheld and Palm Sized PCs, and is Pocketnow's "Android Guy".By day you'll find Joe coding web pages, tweaking for SEO, and leveraging social media to spread the word. By night you'll probably find him writing technology and "prepping" articles, as well as shooting video.Read more about Joe Levi here.