"Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network. The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service. We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.
That said, we don't restrict users from going to a Web site that lets them view videos. But what our terms and conditions prohibit is the transferring, or slinging, of a TV signal to their personal computer or smartphone.
The Slingbox application for the iPhone runs on WiFi. That's good news for AT&T's iPhone 3G customers, who get free WiFi access at our 20,000 owned and operated hot spots in the U.S., including Starbucks, McDonalds, Barnes & Noble, hotels, and airports. AT&T is the industry leader in WiFi."
But Engadget has a nice article about the whole saga which has altready collected 184 comments. I think if this is news to you to follow the link below for the article;
AT&T and Slingbox, Engadget