iPhone App Developers Find Weaknesses in AT&T's Fake Walls

Whenever you open up a previously-closed system and let the technology hordes have at it, the hordes do a pretty good job of finding artificial and inefficient business barriers -- and exploiting them. This is what file-sharing enthusiasts did to the music business. It's what Craigslist users are doing to newspapers.

And now, Apple (AAPL) didn't just open the iPhone to developers -- by opening the iPhone, Apple essentially exposed AT&T's (T) wireless network to the world's coders. Like all major U.S. wireless networks, AT&T's has long been as closed as an old-time communist dictatorship, with accompanying weird inefficiencies that really don't make much sense.

Like: If you have a high-speed data phone, and you have a laptop computer, and you're stuck in some train station with no Wi-Fi and you need to get your laptop on the Net -- why couldn't you tether your phone to your laptop and use the phone as a modem? The answer, really, is that AT&T wants to sell you a separate device and separate plan (at about $60 a month) for wireless Internet access on your laptop. So AT&T's contracts prevent AT&T's phones from being tethered to laptops.

This bit of nonsense is being challenged by a company called Nullriver, which created an iPhone app called NetShare. It turns the iPhone into a wireless modem. Except Apple seems to have been forced by AT&T to take NetShare off the App Store.

But as we've seen in other versions of this story, fake business walls only hold so long in the Internet age.

Comments

[davesmall:]

Bingo. You nailed it with this article.

AT&T is offending and insulting iPhone users by saying tethering is OK on their network if you buy a Nokia but not if you buy an iPhone. Huh?? What's that about??

AT&T is also making the iPhone less attractive by prohibiting tethering.

In my case I can't justify the cost of separate AT&T data plans for my iPhone and my computer. I would only use tethering on occasion, as when my cable modem goes down or I'm traveling about and need to access something with my laptop that I can't get to with my iPhone. That happens once in a while but not often enough to justify a separate data plan.

So please tell AT&T to back off on this and lower their wall.

2008 Aug 11 12:45 PM

[nokiauser:]

Lets look at it from AT&T perspective. The data consumption with a phone tethered to a laptop is likely to be way higher than just a phone on its own. Bandwidth over the air is not free, its a limited resource so I can understand them wanting users to pay more for tethering/data cards. They could set upper limits on monthly data transfers, high enough that most user's would never hit them, but that would require users be informed when they are near the limits (a simple SMS should work). The problem is in the marketing which talks of "unlimited" data plans. As soon as they would implement limits, even high limits, the competition would be all over them.

People will always try to game they system and companies will respond. I guess this is another reason not to trade in my Nokia for an iPhone - I can still game the system with the Nokia. The other reason is iPhone's lack of voice dialing which is a no-no for a good handsfree in-car experience.

2008 Aug 11 01:10 PM

[mag:]

"People will always try to game they system and companies will respond. I guess this is another reason not to trade in my Nokia for an iPhone - I can still game the system with the Nokia. The other reason is iPhone's lack of voice dialing which is a no-no for a good handsfree in-car experience."

Apple freaks will not forgive for uttering a negative comment about the iPhone...

2008 Aug 11 06:04 PM

[JosephKr:]

Just an interesting note: One of the fellows on today's edition of Fast Money on CNBC quipped that Apple has "already sold 3,000,000" 3G iPhones. That's since July 11, exactly one month. That works out to at least 9,000,000 phones for the quarter NOT COUNTING the pending 22 extra countries coming on line on August 22! That would be a minimum of 36,000,000 phones per year if the rate holds, again without those 22 other countries. See where this is going? Get your stock TODAY, because $174 is gonna look like a huge BARGAIN in a few weeks! You read it here first!

2008 Aug 12 12:04 AM

[Nick Gogerty:]

Most telco's are closed systems by design and now by business model requirement. Does anyone really believe that overpriced PSTN service won't be bumped by IP based services. $0.15 txt messages etc. are the dinasours diet. The Telco's are in a commodity business, they just don't know it yet. The future is going to see telcos eeking out smaller margins as they really only supply pipes. Bits is bits. IP uber alles.

2008 Aug 12 09:11 AM

[SayWhat?!:]

Pardon my confusion, but I just don't get it. As I understand the tethering App Netshare, you get an internet connection to your laptop. While it is running, the internet/data connection to other iPhone Apps like Safari, Mail, etc., are disabled. Since the other iPhone Apps have full internet capability limited by the 3G throughput rate, the data rate of the iPhone vs tethered laptop is the same. The only thing you gain with the laptop connection is the larger screen display, ability to download email to your email client and the ability to run other applications not available on the iPhone concurrently. There is no double duty, or additional device running concurrently, to cause excess data usage and abuse of the "unlimited iPhone Data" offering.
So, what's the problem with tethering?

2008 Aug 12 10:39 AM