With the new iPhone app, available in both a free version and a paid version which allows for more control over what you watch (OrbLive free just streams random files), you can now stream your media over 3G in addition to Wi-Fi and EDGE. Given Apple's approval of this application, they've set a precedent for approving apps that stream live video over 3G. They could now no longer block approval to apps like Slingbox, for example, as doing so would be illegal and anti-competitive. If they approved the OrbLive app knowingly, then we can expect a slew of 3G-enabled live TV and streaming media applications in the near future.

Of course, the new OrbLive app may have been admitted into the App Store by mistake, so before shelling out the $9.99 to purchase it, you may want to wait and see if the app is yanked in the next few days. We hope that's not the case, because live TV on the iPhone over 3G would be truly incredible. But this is Apple, so you never really know. 

On Wednesday I received a text message from AT&T. This isn't unusual if you're an iPhone owner and still on the AT&T network. However the following text message probably made just about every iPhone owner run to the nearest coffee shop with an AT&T hotspot:

"AT&T Free Msg: Your Apple iPhone now has free AT&T Wi-Fi access at thousands of hotspots nationwide, including Starbucks*. "

AT&T hotspots can be found at thousands of locations. A huge emphasis is being placed on hotspots at Starbucks due to their new partnership that converted thousands of T-Mobile hotspots into AT&T hotspots. We all know that a Starbucks can be found on just about every corner and if not, there's always Barnes and Nobles.

Can I Use it on my Laptop Too?

In my personal tests at my local Barnes and Nobles I was able to connect my iPhone without a hitch. All it took was selecting the correct Wi-Fi network and my phone number to get things going. From there, a text message was sent to my iPhone with a secure link to access the hotspot. According to AT&T the link is only valid for 24 hours. Also, if you relocate to another hotspot you'll have to request a new link. Unfortunately, copying the link into the address bar of my laptop did not allow me to access the Wi-Fi from my laptop instead of my iPhone. Will we see a work around for this in the future?

During the period where the activation servers were down, the Apple store employees let everybody still buy their phones and had them finalize the activation at home. As it turns out, that might not have been very useful at all, especially if the iPhone servers are still only working intermittently.

According to various reports online, these problems weren't just limited to the US, but pretty much occurred around the globe. Given how widespread these reports about problems are, it would seem that the majority of issues was more due to Apple's fault than the local carriers'.

The usage capped broadband, meanwhile, is going to be tested sometime in the next quarter in Beaumont, Texas. So for the time being, the two services won't overlap.

According to Time Warner, the reason for the trial of usage based billing net access, is because the growing popularity of online video is causing congestion on their network. Why, then, introduce a service at the same time that will only serve to increase the amount of online video being downloaded over your network? Of course, by tying the HBO service to the Road Runner broadband service, Time Warner is essentially passing the cost of a "free" product to consumers by raising rates elsewhere.

If Time Warner wants to encourage users to stream more video over its network, it can't also penalize users who stream more video over its network.

As Ars Technica points out, the whole thing is short-sighted. Per usage billing won't fly with consumers who have unlimited use broadband options elsewhere, and competition is only going to get stiffer for the cable industry. Verizon, for example, has no plans to try usage caps with its DSL or FiOS services, and on the horizon we can look forward to 4G wireless broadband, a possible wireless broadband service on the 700MHz spectrum being auctioned off starting this week, and Sprint's Xohm WiMAX network. Not to mention continued roll-outs and improvements of Verizon's FiOS and AT&T's U-Verse services.

"Instead of developing plans designed to discourage consumers from feeding at the bandwidth trough, cable companies would be better served in the long run by making investments in new technologies like DOCSIS 3.0 and the kind of infrastructure improvements necessary to meet bandwidth demands," writes Ars Technica's Eric Bangeman. It seems likely that in the face of competition and potential consumer distaste over proposed usage limits and practices like bandwidth throttling, cable companies may be forced to make just that type of investment, even though it might be unpopular with shareholders.