AT&T Puts Unauthorized “Tethering” Users on Notice

Yet Another Sign That Consumers Want Truly Mobile Broadband

I’ll admit it, despite the fact that my profession dictates that I closely monitor cutting edge developments in communications and media, the fact of the matter is that I’m a late adopter.  But I do know what I want in service, and it’s probably the same as what most people want: the fastest, most ubiquitous connection possible to the Internet.  I’ve only had a smartphone with an unlimited data plan for about eight months now, but I very quickly learned to use—nay, rely upon—the Pandora app for music, the NPR app for my morning news, the Facebook connection, checking email, etc…It’s great to be truly mobile and be able to do those things.  Even the occasional Youtube video has been viewed while killing time, and how ‘bout that Google Skymap?

As great as it is, however, I can hardly do my real work on a smartphone, so that means when working, I’m limited to places where I can get a WiFi connection for my laptop—usually in my kitchen or on my patio, though I have been known to crank out an article at Starbucks.  But one headline I saw today, that AT&T (NYSE:T) is cracking down on unauthorized tethering of “jailbroken” handsets that can serve as a modem, has opened my mind to a whole new set of possibilities.  I could actually use my phone as a wireless modem and then literally be connected anywhere the Verizon Wireless (NYSE:VZ) 3G (and later 4G) network is available.  Finally, I could work at the beach (if I didn’t live in New Mexico)!

Of course, I did know previously that this service was available, but I just assumed it cost much more than it does and frankly the major wireless carriers haven’t promoted tethering services very hard, for obvious reasons:  network capacity is still an issue when it comes to mobile data usage, especially for AT&T.  Downloading or sending big files is probably still fairly slow and I might lose productivity at the beach with only a 3G connection.  But 4G isn’t just coming, in some places it’s here, and it’s spreading pretty rapidly.  Presumably I would be able to work just as efficiently over a 4G network as I do from home today.

What does this mean?  It means that I wouldn’t need my cable broadband service (or DSL if that’s what I were using).  I presently spend about $100 per month for broadband, a video package and VoIP phone service.  That price will be good for six months, then I’ll be spending even more, up to as much as $130-$140 monthly.  Considering that I don’t actually use the video or the phone service at this time, really I’m spending $100 for high-speed internet.  (The standalone Internet service for my speed was nearly $70/month, it just made sense to get the promotional package since friends and family will probably appreciate cable TV when they visit).  I generally use a cell phone for all calls and stream video to my laptop (which I plan to hook up to a tv) when I want to watch a movie.

So rather than send $100 per month to Comcast (Nasdaq:CMCSA), all I really need to do, once 4G service hits my market (which admittedly may be a while) is pay the extra $20 per month to Verizon (for 2 GBs of data), and my $50 smartphone becomes my modem.

OK, I already know that many readers will suggest that 2GBs of data won’t be enough, and my spend will probably be closer to $50 per month based on current pricing.  But for me, that compares with $100+ and rising…Keep in mind, I'm already paying the $30 per month fee for unlimited data on the handset, so the comparison is for the incremental cost:  $20 versus $100.

Apparently, a lot of folks had already figured this out and in fact, had figured out how to do it without paying the additional tethering fees to the carriers.  They’re busted now, but it does explain, perhaps, why there are so many ads for “jailbroken” handsets on Craigslist!

Essentially, the news this morning was that AT&T has begun sending text messages and email messages to subscribers who have been using their handsets as a modem without paying the additional $20 per month tethering fee (which, by the way, gets you 4 Gigs of data with AT&T).  This can apparently be done with certain jailbroken handsets and an app called MyWi, but AT&T’s network was smart enough to see those users.  AT&T will begin charging the tethering fee to those who continue to access the internet this way, whether they signed up for the plan or not.

I’m not interested in trying to steal the access from a wireless provider by using underhanded methods, but I’m sure interested in cutting my cost for Internet access in half, IF the service is good enough.  And it may not be yet, but it will be.