Solutions for AT&T's lack of tethering (updated)

A reader emailed me his solution for AT&T's lack of tethering:

I cancelled my AT&T service and bought a CDMA Tracfone. I signed up for their Web-only, 1500 minute plan for $199, which becomes 3000 minutes with double minutes. This works out to $16.66 per month versus $75+ per month for the iPhone.

With the savings I subscribed to Mobile Broadband from Verizon wireless ($60/month for 5GB) and got their MiFi 2020 mobile hotspot. My iPhone does everything it did before when it's connected to Wi-Fi, except make phone calls. Unlimited SkypeIn costs only $5 per month and allows me to make VOIP calls through the MiFi's EVDO connection. On top of that, four other devices can connect to the MiFi, for a total of five.

When Apple releases iPhone OS 4.0 with multitasking this summer, VOIP apps like Skype are going to take another huge leap forward.

While a two-phone solution is hardly ideal, he brings up a larger issue that's plaguing AT&T -- its lack of iPhone tethering after promising it over a year ago.

I've been advocating portable WiFi (like the MiFi and Pre+) as an excellent stopgap solution to the iPad's (current) lack of 3G. Simply turn on the mobile hotspot, connect to it from the iPad via WiFi. Problem solved. If you already own a portable 3G solution, i.e. for work, then it's a no brainer.

It continues baffles me as to why AT&T Mobile can't launch iPhone tethering. If they would have launched iPhone tethering plans for $15 and $30 per month (iPad 3G rates) they would be making money hand-over-fist for about a year. Imagine all the WiFi iPad users out there that would sign up.

AT&T is basically handing the mobile broadband market to Verizon on a silver platter and is going to hemorrhage subscribers when the iPhone comes to Verizon.

Update: EVDOinfo.com has posted an article on the many options available to get your iPad online, including the 3G/4G Overdrive from Sprint.

Photo: Engadget