According to Harry McCracken of Technoligizer, AT&T Mobility CEO Ralph De La Vega reportedly told Michael Arrington that the iPhone will be allowed to work as a modem for your notebook soon via wireless tethering over a Bluetooth connection. Michael Arrington's MobileCrunch site, one of the sites in the TechCrunch network, repeated the news in a later post so it would seem legitimate.

One of the largest complaints about the iPhone, both since it was first introduced and since the release of the iPhone 3G, has been the lack of any sort of sanctioned tethering solution that would allow users to connect their computers to the iPhone via a wireless Bluetooth connection and use the internet connection from the iPhone to serve as a wireless modem for the laptop. Since the news is coming from an AT&T executive rather than from Apple, this is less a feature of the phone itself than it is a service which AT&T will start allowing and for which AT&T will most likely charge a subscription fee.

Current guesses for the tethering connection are around $50 to $60 a month, which is on par with the $60 cost of a monthly 3G connection via a wireless laptop card, like the AT&T USBConnect Quicksilver. If the prices are that close, although it would mean a second contract with AT&T, you may want to go the wireless laptop card route, as the price will be nearly the same, you'll have two separate bandwidth caps for both the 3G card and the iPhone rather than sharing the same 5GB per month cap, and the USB connection for the laptop card will take less of your batteries' charge than the drain that maintaining a Bluetooth connection will cause on both your laptop and your iPhone.

No mention has been made on wether there will be an EDGE only tethering plan at reduced cost for people with first generation iPhones.

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