Yep on the $10 paying for LTE, but you cannot listen to anything without it, except FM. I don't know about AM, since I never listen to it. I listen to CNN and MSNBC sometimes on Tune-In, and yes, they have lots of commercials, as you probably know. Ha ha. But I don't think you can listen to any commercial radio station or TV channel without commercials, even when you pay for the service (like Comcast, Spectrum, etc). Even XM has commercials now, I think.
I'd probably pony up the $10 a month to have the connectivity. But, curious, could I use my iPhone hotspot instead?
Nope. I still prefer XM to anything else; installed a Bluetooth XM radio in my Model 3. The only thing I miss about AM is 1010WINS, but they simulcast on an FM band as well, so I’m covered. For those not from the NYC area, 1010WINS is the most glorious of all news outlets. News, weather, traffic, no nonsense, no spin, no bias. Kinda the last bastion of true reporting.
It isn't that AM interferes with the car, it's that the car interferes with AM reception. I was a little skeptical of the claim, but then got a model S loaner that did have an AM tuner(I'm not sure if they still do, if you are getting a new one). Sure enough, with a strong AM signal the sound quality was tolerable but when the AM signal decreased, motor/inverter whine would swamp it. I assume that Tesla didn't think the loss of AM would be a big deal, since TuneIn and FM can take care of much of it, and at much better quality. For me that's true, but I didn't listen to all that much AM in the first place.