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Tethering refers to the practice of using a mobile phone or other portable Internet-ready device to gain Internet access for another device. For example, a mobile phone could be used outdoors as a modem for a laptop computer to gain access to the Internet. Generally, the phone or other portable wireless device is connected to other equipment via a USB cable, or wirelessly if they both support Bluetooth.
A PDA, for example, could gain Internet access from a mobile phone through a Bluetooth connection. In some cases, tethering with a mobile phone might void a phone's warranty ot violate terms of service given by a mobile service plan. A user unaware of data charges could also generate a very large data usage bill by using a mobile phone with a laptop computer to gain proper Internet access.
An example of where tethering has become a controversial issue is its inclusion in the Apple iPhone 3.0 firmware. It's possible usage with an iPhone is not the problem, but at the time of iPhone 3.0's release, it's sole carrier in the United States, AT&T, decided to delay its usage on the network. It emerged later that the bandwidth usage from iPhone users was already 10 times more than that of the average Smartphone user, and AT&T had spent billions of dollars upgrading its 3G network to simply keep up with demand.