At the end of the day, regardless of your feelings of the legality (it's illegal to tether under the contract: FACT)
Sorry, this is definately NOT fact. There is nothing in state or US statutes that says you are forbidden to tether AT&T iPhones under penalty of law. Therefore, tethering is not illegal. If AT&T says in their contract that you cannot tether and you agree to this contract, then you might be in breach of contract. AT&T could sue in CIVIL court and be awarded damages (or they could also lose - it's not clear cut). Doing something illegal gets you into criminal court. Breach of contract gets you into civil court. Big difference between the two.
That being said, is tethering through a hack stealing, making it truely illegal? Jailbreaking is not illegal, we all know that. If MyWi was a program designed solely for the purpose of stealing service, then the creators would be liable criminally. I refer to the early days of DVD encryption bypass programs and satelliteTV hackers and their hardware bootloaders. MyWi would be no different. However, no one is going after MyWi. To be stealing, it can be argued that you would be developing a method whereby you would get service without paying. Since people here are paying for their service and are paying for data, the only thing they're doing is using the data they paid for in a manner not in accordance with their contract. So are they truely stealing? Or simply violating their contract? While you can argue that you are stealing the fee that would be generated from a tethering plan, you cannot argue that you are stealing data that you paid for. If AT&T is charging you twice for the same data, aren't they stealing from you?
Since legitimate points can be made on both sides of the tethering arguement, and there is no clear statute that would prevail, the case would remain in civil court.
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