Sorry but that isn't a legally accurate argument, and the analogy doesn't fit with this situation. I can say with 100% confidence that there is nothing illegal about tethering your phone. It is simply a violation of your contract. Its a Civil matter only, not criminal and it could never be brought to a criminal court. You can be charged fees and not pay and the carrier could sue you for damages, but you would never be in a criminal court.
My only point in this debate is the subject of illegal, against the law and or stealing, non of which this is. Its a civil matter and a contract breech.
Perhaps the word illegal is not always properly used. I will grant you that. I will also give you this: violating a contract is not specifically illegal. But I am not so sure that it is legal to make it possible for people to violate their cell phone contracts en mass. Like selling tethering applications that facilitate wide-spread breach of contract.
Neither thee or me are knowledgeable enough about the law to say if I am wrong or not wrong.
There are other comparisons like the aforementioned example of power use by a neighbor that might or might not be comparable to the issue of tethering. Here is another: you pay the water company $3.00 per month for 'unlimited' water to feed your drip irrigation system as part of your state's low cost "Green Gardening Initiative." Then you purchase a special valve off the net that allows you to access far more water that is intended by the Water Company. For cooking, bathing, drinking, etc. You paid for unlimited water but your use far exceeds what is intended by the Water Company.
That would be theft, pure and simple. In this case, you might simply be cut off and that would be the end of it. Or they decide that you should be made an example of, because thousands of people are buying these valves to access expensive water.
So lets refer to it as a breech of contract, and that you can be punished for. It might not be jail, but you won't escape paying the price in one way or another. Your service can be cut off, you can be charged heavy fees, or your service could be capped. Perhaps your service will be cut and you go on a 'Black List' of sorts, so you find it hard to get service in the future.
The problem is there has yet to be a test case (?). Chances are there won't be, because it is simply easier for AT&T to throw a switch and cut your service.
There are issues like Bandwidth Theft that might not generally apply to tethering your phone or they might. This type of theft generally applies to linking to graphics on another site rather than locally storing a graphic. This type of theft is indeed theft and actionable because it is stealing. In Canada, apparently you can be arrested and you go to jail for bandwidth theft.
Bandwidth is a costly thing and it is limited. It is finite and we can't make more of the stuff. As such, if stolen it can be considered a crime and therefore, actionable. The issue can go beyond contract violations into theft pure and simple. Again, the courts will decide.
Again, not saying it is the same thing as tethering or if it applies. There are many ways it could apply and it is logical to say that tethering your phone could be considered theft, and that is punishable. Or it is simple contract violation and that's that. We will simply have to wait for the inevitable legal cases and then see how the courts rule.
I might suggest that the reason people tether is to avoid something more costly. They want something for free so they circumvent the rules. Not honorable and it might lead to laws that specifically make tethering illegal or phone companies might simply make it impossible to tether their phones. Or tethering continues and we all pay for it.
Guaranteed, you might be wrong or I might be wrong or we are both missing something lawyers bring to court. This issue is much more complicated than a simple disagreement over terms that may or might not apply.
Bob