Tethering your Android phone basically turns it into a mobile hotspot, allowing you to funnel a 3G or 4G internet connection from your phone into your PC or laptop via USB. As you might expect, phone carriers brought the hammer down in an effort to stop users from getting around the fees they charge to normally allow you to do this.
Luckily, the FCC has stepped in and has made Verizon stop its block on tethering apps. AT&T, Sprint and T-Mobile users are unfortunately unaffected by this ruling, but if you have a Verizon plan (or you think that your carrier won't find out, which is likely), here's how you can easily turn your phone into an internet hotspot.
Go into your Android phone's menu and select Settings --> Applications --> Development. In that window, check the box that says USB Debugging.
Go to the Google Play marketplace (previously the Android Market) and run a search for PdaNet, or just click here. Download and install that app.
On the PC or laptop you want to give internet access to, go to the PdaNet website and download the appropriate free PdaNet version for your operating system.
Note: PdaNet is free, but limits secure browsing. You can purchase the full version right now for $15.95.
Connect your phone to your computer with a USB cable. Then run the PdaNet app on your phone and choose Enable USB Tether. The app will begin running as a background service.
On your computer, there will now be a small phone symbol in your system tray. Right-click on that and hit Connect to finish the tether.
You should now have 3G or 4G internet access on your computer. Be careful how much data you use though, as your carrier may become suspicious if you are downloading an extreme amount.
If you want to use PdaNet on your iPhone, you're going to have to jailbreak the device, since Apple hasn't allowed PdaNet into the iTunes App Store because it "avoids your carrier's tether plan". But now thanks to the FCC's ruling, it might finally make an appearance.