I don't remember the details of O2 product history, as I have a "loaned-out" long-standing legacy PAYG SIM that I pay for that does not expire if not used. It does require a three-monthly top-up of at least £10 to obtain 500 minutes inclusive calls, (or other choice of benefit), valid for one month, but doesn't need that top-up in order to retain the credit balance from the £10. (IIRC). Are you sure you aren't on the same product?
I do know that I am happily chuntering away on a phone and a Three router+SIM. Prior to buying the latter I was using my phone tethered to my laptops and iPad, which didn't stop the phone working normally concurrently. Incidentally that also worked if connecting the phone via USB into an ASUS router, the phone in effect being the modem input to the router. (I bought the unlimited HomeFI to support home CCTV uploading to the cloud, which obviously would fail if I took my mobile with me when I went out).
I don't download extravagantly, but upload several GB per month via the Three HomeFi router.
Re "Chapter and verse", it is more a question of "unquestioned" history, which seems to have caused some providers to become a little deceptive in their advertising. Who would have thought that could happen? (cough)
I'm not aware of a specific Ofcom ruling. It is more to do with its position on net neutrality following investigations into Three and Vodafone, regarding device usage and suchlike, which has caused EE and others to sprout unlimited deals alongside their data-limited ones. In particular it conducted an enquiry into Three
T & Cs, with this result
It is clear from those three links plus the Three website that:
1) Their unlimited SIM is unlimited. (So all other providers' unlimited SIMs have to be else Ofcom will jump on them).
2) Tethering to a phone with such a SIM is necessarily allowed.
3) That SIM can also be inserted into a "Home Wifi"-providing router and provide unlimited data access.
My broadband basic info/help site - www.robertos.me.uk.
Domains, site and mail hosting - Tsohost
Connection - Three 4G, tbb tests normally 35-45Mpbs down, 65Mbps off-peak, 9-24 up.
"Democracy means simply the bludgeoning of the people by the people for the people." Oscar Wilde
Edited by RobertoS (Sun 27-Oct-19 23:56:10)