Using my phone as a hotspot for my xbox live how can I raise the output to create less of a lag ?
The output is slow when the information being handled is a lot. In order to increase output you should clear your memory. You can also close any programs that are not in use at the time. For more instructions, check http://www.ehow.com/how_7633198_speed-up-iphone-3g-os.html.
3G is pretty much capped. You would need to get a router and high speed connection for more. If you don't already have AT&T, their 3G is faster than Verizon. If your phone is 4g, I'm not sure how that would compare to wifi.