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Mobile hotspot devices can connect to a 3G or 4G data network and then act as a Wi-Fi router.

With the advent of Android 2.2 and iOS 3.0, tethering has been baked into the operating systems. Android 2.3 allows tethering and portable Wi-Fi hotspots. Here’s how to set up tethering on an Android phone:

  • Open Settings> Wireless & Network Settings> Tethering & Portable Hotspot.
  • Tap Portable Wi-Fi hotspot > Configure Wi-Fi Hotspot.
  • Give your hotspot a name or SSID – Call it anything you like.
  • Pick a security level, either Open or WPA2 PSK (password encryption), in which case you need to set a password.
  • Save the settings and tick the Portable Wi-Fi hotspot box.

If your carrier hasn’t blocked it, your laptop or tablet should now see a new wireless network with whatever SSID you set. A carrier can request Google to make a tethering app unavailable, if an application is in direct violation of the terms and conditions of a usage contract (which most are).

However, if the developer distributes the application file from something other than the Android Market, for example from a Web site, then the app can still be side-loaded onto the device. But that doesn’t mean carriers can’t detect it and charge you another $15-$25 a month for the privilege.

You can download and use apps such as MyWi for the iPhone, Android WiFi Tether for Android or JoikuSpot Light WiFi Hotspot for Symbian to turn your phone into a hotspot. Nokia says they’re bringing tethering to their new Windows phones.

Those apps do what the phone’s built-in tethering app does, says Computer World, but may escape the knowledge, approval or expense of the carrier.

ComputerWorld has gathered a comprehensive list of hotspot-capable phones currently offered by the Big Four U.S. wireless carriers. The screen grab (below) is sorted by price.

T-Mobile is the cheapest at $15 per month (above your regular data plan). Data plans generally cost from $25 to $70/month.

T-Mobile has a $30 unlimited web and text monthly 4G prepaid service plan — on a no-contract 4G data plan. That plan will be sold exclusively in-store at more than 2,200 Walmart stores. As part of the deal, T-Mobile’s Wal-Mart lineup includes six phones, including its first prepaid “4G” handset – the Samsung Exhibit II 4G, which costs $199.99 without an annual contract. After the 5 GB monthly allotment is used up, speeds are slowed to 2G speeds for remainder of month.

Here’s a summary of data plans by the major U.S. carriers:

Free Press recently complained to the FCC that blocking tethering apps “curtails, restrains, and interferes” with the ability of customers to use apps of their choice. That violates the open access rules Verizon agreed to when it bought a won the 700MHz “C block” of spectrum at auction, says Free Press.

Here’s How to Install Non-Market, Third-party Apps on your Android phone and the Top 5 Essential Android Apps to Install After Rooting Your Android Device.

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