After performing a mass sweep of tethering applications from the Android Market earlier this week, Google have backtracked.  Rather than a total ban, their suggestion is to leave tethering software available to “users outside the T-Mobile US network”:

“We inadvertently unpublished your application for all mobile providers; if you like, we can restore your app so that all Android Market users outside the T-Mobile US network will have access to your application” Google statement to WiFi Tether for Root Users developer

It looks as though, as we suggested, Google has a filtering system which allows them to limit Android Market content depending on carrier.  It’s arguable whether that’s good news or bad; one perspective is that at least developers can promote Android software that, while perhaps falling foul of some carriers’ Terms of Service (ToS), would still be usable by those with unlocked devices on different networks. 

However, a different view might maintain that by giving in to carrier pressure, Google has set a precedent which could significantly impact future software, such as VoIP apps.  The layering of ToS and distribution agreements involving users, carriers and Google themselves makes keeping track of which apps will be permitted, whether partially or totally, difficult, and it’ll only get worse as more carriers sign up their own Android devices.