Cellphone service providers are not allowed to bar the use of cellphones as wireless Internet hotspots for other electronic devices, the Communications Ministry ruled recently.

The Communications Ministry had received complaints that some cellular service providers were blocking or placing restrictions on the features that allow smartphones to share Internet access with nearby electronic devices, like computers or tablets.  This capability, known as tethering, is built into all smartphones. The ministry's ruling prevents cellphone service providers from limiting tethering either directly or through restrictive service fees.

"It turned out that certain companies are blocking a capability built-into smartphones to share Internet connection with other devices," said a statement issued by the ministry. "After contacting and receiving responses from some of the relevant companies, the ministry decided to clarify its position on the issue. The ministry has determined that based on the guidelines set in law, restrictions cannot be placed on the use of structural characteristics that are built into cellular devices, unless such a move is necessary for the proper and fair administration of the cellular network."

The statement added, "Consequently, the ministry decided that companies' placing restrictions or blocking the use of tethering capabilities would be a violation of the Telecommunications Law [originally passed by the Knesset in 1982 and amended several times since]. The ministry rejected the assertion made by some cellphone service providers that blocking tethering is permissible under the law because it is done on the networks operated by telecommunications license holders and not to the end-user's device itself."

The ministry's decision is a blow particularly for HOT Mobile, which after its launch announced that it would block tethering functionality on its phones. Partner Communications (which operates the Orange cellphone brand in Israel) had previously decided to charge its customers additional fees for the service. But Partner recently rescinded its tethering fees, possibly because it had advance knowledge of the ministry's pending decision on the issue.

The Communications Ministry's decision is particularly bold given that regulators in most other countries have yet to announce clear policies regarding net neutrality, and especially cellular networks. According to report by Allot Communications from June, 30 percent of cellphone service providers have blocked or demanded extra fees for tethering capabilities ontheir subscribers' cellphones.