Prominent mobile developer Koushik Dutta has an answer. He created an app that allows users to tether their Android smartphones to their computers and use the data connection as a mobile hotspot. The greatest part, it is nearly untraceable by the carriers.

Dutta said on his Google+ page: "To get around the root requirement on your phone, Tether will need to install a virtual network adapter on your computer; so there is a PC side install."

Dutta notes that the user interface and design of the app are not final and it is definitely a work in progress. Users that want to try out the tethering app have until Jan. 7 to download the setup to Mac, Windows or Linux machines. Users that want to get the Android APK directly can find it here.

"It functions as a proxy, and not as a NAT/masquerade solution that other tether solutions use," Dutta wrote. "Though carriers can still check for http user agent string, but I have an idea to work around that. They typically check the TTL for desktop values. All usual carrier data charges and quotas will apply, but you will not need a separate tethering plan."

All Dutta asks for in this release is feedback. He wants to know if users had any problems installing it and getting it to work and how fast the download speed is once it is up and running.

Dutta says that he is working on creating a Bluetooth option for hotspot tethering as well. He also notes there is no UI for the Linux interface. While Dutta says he would prefer not to use a PC side installation, it is not possible without rooting the device.

Download for Mac
Download for Windows
Download for Linux

If you install the app, make sure to let Koush know how you found the process. Also, let us know in the comments here what your experiences are with the app.

The move from Verizon comes the day after AT&T started moving jailbroken hotspot users without data plans involuntarily to tiered data plans. Verizon hotspot plans start at $20 for 2 GB of data when added to a data plan of $29.99 or more. Every GB after the 2 GB threshold is an additional $20. The move corresponds with U.S. carriers closing loopholes in their pricing structures to maximize revenue from data as voice and text messaging revenue decreases.

The timing of Verizon's move to block jailbroken tethering access is worth noting. Coming in the wake of AT&T's move yesterday and taking effect on a Friday (if not within the last two days), it shows that the operator does not want the news to make a big splash. Reports surfaced Friday morning that AT&T would begin throttling the bandwidth of heavy users and only later confirmed their plans with a press release late in the afternoon, EST.

Moves like this should not take consumers by surprise. The networks do not like consumers getting away with data for free. Any loophole that consumers can be use to get around data plans or additional services (like the extra charge for tethering) will be closed and the operators will point users to their pages highlighting data rates.

From the announcement:

"We have been politely cautioned by Palm that any discussion of tethering during the Sprint exclusivity period (and perhaps beyond--we don't know yet) will probably cause Sprint to complain to Palm, and if that happened then Palm would be forced to react against the people running the IRC channel and this wiki. We want to retain a good relationship with Palm, hence we are not allowing discussion of tethering on the IRC channel, or in this wiki. Note that Sprint does not have a plan available for use with the Pre which allows tethering under the Terms Of Service. Once there is a version of the Pre available for a carrier that does allow tethering, or an unlocked GSM version, then we may be able to change this policy."

As Bill Ray points out in good coverage at the Register, developers grow frustrated when the hardware they've purchased can't be tinkered with to their hearts' content. Users certainly lose out when that's the case. Fortunately almost any control over hardware can be broken - but what do you do when the hardware vendor cracks down on conversation about open use of the technology around the web?

It certainly seems like a recipe for ill will between Palm and developers, but Google's Android team made a similar move when it pulled all tethering apps from the Android store this spring at partner T-Mobile's behest.

Mobile developer Jason Grigsby argues that it's not just about big bad carriers and revenue. "Carriers have a delicate balancing act between the desire for more data and services revenue and the fact that their networks can't handle huge increases in data usage," he told us. "Everything is a compromise in this space."

We're more sympathetic with consumers demanding more data and developers seeking to create wondrous new innovation on top of that increased flow of data and hardware than we are sympathetic with carriers struggling to fill and monetize that demand. We understand that telcoms have made huge investments already that they must recoup, but it sure seems like they have invested too little and are making too much money off of service that few consumers are satisfied with. Imagine if the electricity companies in this country were hated as much as the telcom carriers. They aren't, so we suspect it doesn't have to be this way.