The 2G stuff worked almost everywhere in the US there was cell service, and when 3G came out it was only good in the big cities for a number of years.
Before USB, things that made a smartphone smart were its ability to get your laptop (or desktop) on the internet, anywhere that you had cell service. No differently than from a land line (except the land line did not charge by the minute unless it was long-distance). This is when you were paying for cellular voice service by the minute, with a certain number of free minutes included each month by this time. Dial-up ISP was on similar terms from a different provider like AOL, "always on" broadband was not very familiar yet and people were still accustomed to internet "sessions" where you log off as soon as you are finished.
With cellphones and ISPs most people were still acting like every session should be limited or it could end up running their minutes over, and for the relatively few who wanted portable internet it had always been double minutes (well from two providers) in cost so the airwaves were not filled with any significant data minutes compared to voice. If it could wait people would do it on a land line, even long conversations.
Oh, yeah, the cellphone itself was "on the internet" but about all it would do is email. Without a camera, color screen or very much of a keyboard the idea was to connect to a laptop if you needed portable internet.
Which is why the phones eventually had a free software suite from the manufacturer which included the PC drivers for its cellular modem so you could dial-up to places like AOL. It was a virtual COM port which the PC could address like it was internal hardware, dial out to any ISP you had an account with, and the modem naturally communicated with the answering party over regular phone lines like it was supposed to do. Once AT&T itself started offering broadband, they also had toll-free phone numbers posted for account holders to use when they were not at their home router. You could dial up from any land line or smartphone.
There was also a driver for the phone's virtual ethernet adapter if you wanted to use that, your phone would have an IP address. This is not the phone connecting by wifi, that came later.
It was the PC software that made smartphones smart, along with removable storage, and USB networking when it came along.
The early Motorola and Sony-Ericsson phones had infrared COM ports, to communicate with the early business laptops which had physical IR COM ports. Laptops were not yet affordable for very many students at all. IOW using Windows 98 over IR all you needed was the same built-in Windows apps to dial-up and log in to your ISP of choice, or alternatively autodial a fax machine and use Windows Faxing to send or receive a document straight from a file, with no paper involved at your end. Office 97 was not even necessary. Remember faxing was well established way before the internet got popular.
The virtual COM ports over USB or Bluetooth came later but served the same purpose.
After IR ports were long gone, the most common approach was using the USB cable but nobody called it "tethering" (that would have to wait until a different paradigm could be adopted and it could be billed for in an ongoing way). The USB cables were proprietary at one end and did cost about $30 extra so it was definitely not as popular as it could have been.
Sure enough, one day somebody decided they would get more cellphone customers if they had "unlimited minutes". And also, cellular carriers gradually became ISPs themselves.
But that basically meant that smartphone customers could have "always on" internet for the first time in history, even though it was not widely recognized.
Over about a year period the carriers disavowed all knowledge of specialized USB communication cables. This was still before the iPhone but I could tell things were going downhill, and wanted to get some spare Sony cables before my phone was discontinued and replaced by a less capable but more expensive unit. In the retail stores you could tell they were operating from a script when they said they had never had factory USB cords, and it was the same stores where they had been in stock in earlier years.
They did usher in a new generation of phones, a few of which would eventually communicate over generic USB cords. If you had a data plan, which would be charged extra, and there was no more factory cellphone software.
The carrier handled it all, that's when they started calling it "tethering", always meaning that there's "supposed to be" an upcharge, and acting like it's a new feature with never-before-seen convenience.
Fortunately the gigabytes have gotten liberal and it has gotten pretty convenient to enable tethering on Android, then connect any PC by USB or Bluetooth and be online.
As the article says, "it was pretty messy for a while there, and it had nothing to do with the devices. It was basically the providers getting in the way."