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AT&T Undercuts Verizon, T-Mobile With New Unlimited Plan (cnet.com)
Roger Cheng, writing for CNET: AT&T just fired the latest salvo in the unlimited data wars. The Dallas telecommunications giant unveiled two new unlimited data plans. The first is Unlimited Choice, a stripped-down plan that comes with unlimited data at a maximum speed of 3 megabits per second, standard definition, and no mobile hotspot. At $60, it's lower than T-Mobile's $70 plan and Verizon's $80 option. Both plans, however, offer you full high-definition video and 10 gigabytes of mobile hotspot access. Sprint still offers the cheapest option at $50 a month, although prices rise by $10 after a year. AT&T continues to push its video aspirations with higher end option called Unlimited Plus that includes HD video and 10GB of mobile hotspot access. The plan costs $90 a month, but gives you the option to add DirecTV Now streaming video service for $10 and DirecTV home satellite TV service for $25 a month.
The fact that TMO is owned by the germans it's not as alien for them to offer a tax/fee included rate.
Android and iOS have a tethering API. There is a separate APN entry for DUN (tethering). On Android at least, there are hacks with root that you can do to force the phone to not report this as tethering usage to the carrier, but ultimately if they wanted to they could figure it out.
...I do not think it means what you think it means.
To undercut in price generally means to offer goods or services of comparable quality at a lower price. AT&T's offering remains inferior to its competitors; therefore, it cannot be regarded as "undercutting."
If someone is selling upscale donuts at $5 a piece, am I "undercutting" them if I decide to sell cardboard "donuts" at 10 cents each?