Tethering, or phone-as-modem (PAM), is the sharing of a mobile device's Internet connection with other connected computers. Connection of a mobile device with other devices can be done over wireless LAN (Wi-Fi), over Bluetooth or by physical connection using a cable, for example through USB.
If tethering is done over WLAN, the feature may be branded as a personal hotspot or mobile hotspot, which allows the device to serve as a portable router. Mobile hotspots may be protected by a PIN or password. The Internet-connected mobile device can act as a portable wireless access point and router for devices connected to it.
Some carriers require that you sign up for special plans in order to use your phone for tethering, while for others it's simply a matter of paying the data traffic used, much like you pay for browsing on your mobile phone.