Google has reportedly pulled tethering apps from the Android Market. According to at least one developer, who contributed to the WiFi Tether for Root Users app, Google are citing their distribution agreements with carriers as the prompt for removal:
"Google enters into distribution agreements with device manufacturers and Authorized Carriers to place the Market software client application for the Market on Devices. These distribution agreements may require the involuntary removal of Products in violation of the Device manufacturer’s or Authorized Carrier’s terms of service" Google Developer Distribution Agreement
That agreement, when taken with T-Mobile's terms of service that do not permit tethering, has given Google reason to pull the software from official distribution. It's a decision that has raised more questions over just how "open" the Android platform is:
"Android phones are supposed to be released for other carriers in the future, right? Does this mean that apps in the Market have to adhere to the ToS for only T-Mobile, even when other carriers sign on? Will all apps have to adhere to the ToS for every carrier that supports Android phones?" Seth, WiFi Tether for Root Users contributor
Given that Android-based devices are already available unlocked, it seems unfair that those users - who may be with carriers that permit tethering, or have already paid for the functionality - should not have access to the software. In addition, some of the apps reportedly banned do not solely offer carrier tethering (e.g. sharing the cellular data connection via USB or WiFi) but Bluetooth tethering, where the cellphone acts as a bridge between a WiFi broadband connection and a Bluetooth-equipped device that lacks its own WiFi.
One potentially unwelcome outcome could be carrier-specific versions of the Android Market, where users would have only partial access to the full app catalog depending on what their carrier allowed.