diff --git a/Tethering/src/com/android/networkstack/tethering/Tethering.java b/Tethering/src/com/android/networkstack/tethering/Tethering.java
index 254b60f..bdc9387 100644
--- a/Tethering/src/com/android/networkstack/tethering/Tethering.java
+++ b/Tethering/src/com/android/networkstack/tethering/Tethering.java
@@ -2089,7 +2089,7 @@
                 }
 
                 mRoutingCoordinator.maybeRemoveDeprecatedUpstreams();
-                mUpstreamNetworkMonitor.startObserveAllNetworks();
+                mUpstreamNetworkMonitor.startObserveUpstreamNetworks();
 
                 // TODO: De-duplicate with updateUpstreamWanted() below.
                 if (upstreamWanted()) {
diff --git a/Tethering/src/com/android/networkstack/tethering/UpstreamNetworkMonitor.java b/Tethering/src/com/android/networkstack/tethering/UpstreamNetworkMonitor.java
index 7a05d74..9705d84 100644
--- a/Tethering/src/com/android/networkstack/tethering/UpstreamNetworkMonitor.java
+++ b/Tethering/src/com/android/networkstack/tethering/UpstreamNetworkMonitor.java
@@ -24,6 +24,7 @@
 import static android.net.ConnectivityManager.TYPE_WIFI;
 import static android.net.NetworkCapabilities.NET_CAPABILITY_DUN;
 import static android.net.NetworkCapabilities.NET_CAPABILITY_INTERNET;
+import static android.net.NetworkCapabilities.NET_CAPABILITY_LOCAL_NETWORK;
 import static android.net.NetworkCapabilities.NET_CAPABILITY_NOT_RESTRICTED;
 import static android.net.NetworkCapabilities.NET_CAPABILITY_NOT_VPN;
 import static android.net.NetworkCapabilities.TRANSPORT_CELLULAR;
@@ -44,6 +45,7 @@
 import androidx.annotation.Nullable;
 
 import com.android.internal.annotations.VisibleForTesting;
+import com.android.modules.utils.build.SdkLevel;
 import com.android.net.module.util.SharedLog;
 import com.android.networkstack.apishim.ConnectivityManagerShimImpl;
 import com.android.networkstack.apishim.common.ConnectivityManagerShim;
@@ -62,9 +64,10 @@
  * The owner of UNM gets it to register network callbacks by calling the
  * following methods :
  * Calling #startTrackDefaultNetwork() to track the system default network.
- * Calling #startObserveAllNetworks() to observe all networks. Listening all
- * networks is necessary while the expression of preferred upstreams remains
- * a list of legacy connectivity types.  In future, this can be revisited.
+ * Calling #startObserveUpstreamNetworks() to observe upstream networks.
+ * Listening all upstream networks is necessary while the expression of
+ * preferred upstreams remains a list of legacy connectivity types.
+ * In future, this can be revisited.
  * Calling #setTryCell() to request bringing up mobile DUN or HIPRI.
  *
  * The methods and data members of this class are only to be accessed and
@@ -94,7 +97,7 @@
     @VisibleForTesting
     public static final int TYPE_NONE = -1;
 
-    private static final int CALLBACK_LISTEN_ALL = 1;
+    private static final int CALLBACK_LISTEN_UPSTREAM = 1;
     private static final int CALLBACK_DEFAULT_INTERNET = 2;
     private static final int CALLBACK_MOBILE_REQUEST = 3;
 
@@ -116,7 +119,7 @@
     private HashSet<IpPrefix> mLocalPrefixes;
     private ConnectivityManager mCM;
     private EntitlementManager mEntitlementMgr;
-    private NetworkCallback mListenAllCallback;
+    private NetworkCallback mListenUpstreamCallback;
     private NetworkCallback mDefaultNetworkCallback;
     private NetworkCallback mMobileNetworkCallback;
 
@@ -157,20 +160,29 @@
         }
         ConnectivityManagerShim mCmShim = ConnectivityManagerShimImpl.newInstance(mContext);
         mDefaultNetworkCallback = new UpstreamNetworkCallback(CALLBACK_DEFAULT_INTERNET);
+        // TODO (b/382413665): By definition, a local network cannot be the system default,
+        //  because it does not provide internet capability. Figure out whether this
+        //  is enforced in ConnectivityService. Or what will happen for tethering if it happens.
         mCmShim.registerSystemDefaultNetworkCallback(mDefaultNetworkCallback, mHandler);
         if (mEntitlementMgr == null) {
             mEntitlementMgr = entitle;
         }
     }
 
-    /** Listen all networks. */
-    public void startObserveAllNetworks() {
+    /** Listen upstream networks. */
+    public void startObserveUpstreamNetworks() {
         stop();
 
-        final NetworkRequest listenAllRequest = new NetworkRequest.Builder()
-                .clearCapabilities().build();
-        mListenAllCallback = new UpstreamNetworkCallback(CALLBACK_LISTEN_ALL);
-        cm().registerNetworkCallback(listenAllRequest, mListenAllCallback, mHandler);
+        final NetworkRequest listenUpstreamRequest;
+        // Before V, only TV supports local agent on U, which doesn't support tethering.
+        if (SdkLevel.isAtLeastV()) {
+            listenUpstreamRequest = new NetworkRequest.Builder().clearCapabilities()
+                    .addForbiddenCapability(NET_CAPABILITY_LOCAL_NETWORK).build();
+        }  else {
+            listenUpstreamRequest = new NetworkRequest.Builder().clearCapabilities().build();
+        }
+        mListenUpstreamCallback = new UpstreamNetworkCallback(CALLBACK_LISTEN_UPSTREAM);
+        cm().registerNetworkCallback(listenUpstreamRequest, mListenUpstreamCallback, mHandler);
     }
 
     /**
@@ -183,8 +195,8 @@
     public void stop() {
         setTryCell(false);
 
-        releaseCallback(mListenAllCallback);
-        mListenAllCallback = null;
+        releaseCallback(mListenUpstreamCallback);
+        mListenUpstreamCallback = null;
 
         mNetworkMap.clear();
     }
@@ -535,10 +547,10 @@
                 return;
             }
 
-            // Any non-LISTEN_ALL callback will necessarily concern a network that will
-            // also match the LISTEN_ALL callback by construction of the LISTEN_ALL callback.
-            // So it's not useful to do this work for non-LISTEN_ALL callbacks.
-            if (mCallbackType == CALLBACK_LISTEN_ALL) {
+            // Any non-LISTEN_UPSTREAM callback will necessarily concern a network that will
+            // also match the LISTEN_UPSTREAM callback by construction of the LISTEN_UPSTREAM
+            // callback. So it's not useful to do this work for non-LISTEN_UPSTREAM callbacks.
+            if (mCallbackType == CALLBACK_LISTEN_UPSTREAM) {
                 recomputeLocalPrefixes();
             }
         }
@@ -555,10 +567,11 @@
             }
 
             handleLost(network);
-            // Any non-LISTEN_ALL callback will necessarily concern a network that will
-            // also match the LISTEN_ALL callback by construction of the LISTEN_ALL callback.
-            // So it's not useful to do this work for non-LISTEN_ALL callbacks.
-            if (mCallbackType == CALLBACK_LISTEN_ALL) {
+            // Any non-LISTEN_UPSTREAM callback will necessarily concern a network that will
+            // also match the LISTEN_UPSTREAM callback by construction of the
+            // LISTEN_UPSTREAM callback. So it's not useful to do this work for
+            // non-LISTEN_UPSTREAM callbacks.
+            if (mCallbackType == CALLBACK_LISTEN_UPSTREAM) {
                 recomputeLocalPrefixes();
             }
         }
diff --git a/Tethering/tests/unit/src/com/android/networkstack/tethering/TestConnectivityManager.java b/Tethering/tests/unit/src/com/android/networkstack/tethering/TestConnectivityManager.java
index b2cbf75..51ba140 100644
--- a/Tethering/tests/unit/src/com/android/networkstack/tethering/TestConnectivityManager.java
+++ b/Tethering/tests/unit/src/com/android/networkstack/tethering/TestConnectivityManager.java
@@ -18,6 +18,7 @@
 
 import static android.net.NetworkCapabilities.NET_CAPABILITY_DUN;
 import static android.net.NetworkCapabilities.NET_CAPABILITY_INTERNET;
+import static android.net.NetworkCapabilities.NET_CAPABILITY_LOCAL_NETWORK;
 import static android.net.NetworkCapabilities.TRANSPORT_CELLULAR;
 
 import static com.android.networkstack.apishim.common.ShimUtils.isAtLeastS;
@@ -41,6 +42,8 @@
 import androidx.annotation.NonNull;
 import androidx.annotation.Nullable;
 
+import com.android.modules.utils.build.SdkLevel;
+
 import java.util.Map;
 import java.util.Objects;
 
@@ -119,12 +122,15 @@
                 && mLegacyTypeMap.isEmpty();
     }
 
-    boolean isListeningForAll() {
-        final NetworkCapabilities empty = new NetworkCapabilities();
-        empty.clearAll();
+    boolean isListeningForUpstream() {
+        final NetworkCapabilities upstreamNc = new NetworkCapabilities();
+        upstreamNc.clearAll();
+        if (SdkLevel.isAtLeastV()) {
+            upstreamNc.addForbiddenCapability(NET_CAPABILITY_LOCAL_NETWORK);
+        }
 
         for (NetworkRequestInfo nri : mListening.values()) {
-            if (nri.request.networkCapabilities.equalRequestableCapabilities(empty)) {
+            if (nri.request.networkCapabilities.equalRequestableCapabilities(upstreamNc)) {
                 return true;
             }
         }
diff --git a/Tethering/tests/unit/src/com/android/networkstack/tethering/TetheringTest.java b/Tethering/tests/unit/src/com/android/networkstack/tethering/TetheringTest.java
index 0c6a95d..32f0756 100644
--- a/Tethering/tests/unit/src/com/android/networkstack/tethering/TetheringTest.java
+++ b/Tethering/tests/unit/src/com/android/networkstack/tethering/TetheringTest.java
@@ -1032,7 +1032,7 @@
         verify(mWifiManager).updateInterfaceIpState(TEST_WLAN_IFNAME, expectedState);
         verifyNoMoreInteractions(mWifiManager);
 
-        verify(mUpstreamNetworkMonitor).startObserveAllNetworks();
+        verify(mUpstreamNetworkMonitor).startObserveUpstreamNetworks();
         if (isLocalOnly) {
             // There are 2 IpServer state change events: STATE_AVAILABLE -> STATE_LOCAL_ONLY.
             verify(mNotificationUpdater, times(2)).onDownstreamChanged(DOWNSTREAM_NONE);
@@ -1260,7 +1260,7 @@
         // Start USB tethering with no current upstream.
         prepareUsbTethering();
         sendUsbBroadcast(true, true, TETHER_USB_RNDIS_FUNCTION);
-        inOrder.verify(mUpstreamNetworkMonitor).startObserveAllNetworks();
+        inOrder.verify(mUpstreamNetworkMonitor).startObserveUpstreamNetworks();
         inOrder.verify(mUpstreamNetworkMonitor).setTryCell(true);
 
         // Pretend cellular connected and expect the upstream to be set.
@@ -1859,7 +1859,7 @@
         // Start USB tethering with no current upstream.
         prepareUsbTethering();
         sendUsbBroadcast(true, true, TETHER_USB_RNDIS_FUNCTION);
-        inOrder.verify(mUpstreamNetworkMonitor).startObserveAllNetworks();
+        inOrder.verify(mUpstreamNetworkMonitor).startObserveUpstreamNetworks();
         inOrder.verify(mUpstreamNetworkMonitor).setTryCell(true);
         ArgumentCaptor<NetworkCallback> captor = ArgumentCaptor.forClass(NetworkCallback.class);
         inOrder.verify(mCm).requestNetwork(any(), eq(0), eq(TYPE_MOBILE_DUN), any(),
@@ -2587,7 +2587,7 @@
         verify(mNetd, times(1)).tetherStartWithConfiguration(any());
         verifyNoMoreInteractions(mNetd);
         verifyTetheringBroadcast(TEST_P2P_IFNAME, EXTRA_ACTIVE_LOCAL_ONLY);
-        verify(mUpstreamNetworkMonitor, times(1)).startObserveAllNetworks();
+        verify(mUpstreamNetworkMonitor, times(1)).startObserveUpstreamNetworks();
         // There are 2 IpServer state change events: STATE_AVAILABLE -> STATE_LOCAL_ONLY
         verify(mNotificationUpdater, times(2)).onDownstreamChanged(DOWNSTREAM_NONE);
 
@@ -3757,7 +3757,7 @@
         verifyInterfaceServingModeStarted(TEST_P2P_IFNAME);
         verifyTetheringBroadcast(TEST_P2P_IFNAME, EXTRA_AVAILABLE_TETHER);
         verifyTetheringBroadcast(TEST_P2P_IFNAME, EXTRA_ACTIVE_LOCAL_ONLY);
-        verify(mUpstreamNetworkMonitor).startObserveAllNetworks();
+        verify(mUpstreamNetworkMonitor).startObserveUpstreamNetworks();
         // Verify never enable upstream if only P2P active.
         verify(mUpstreamNetworkMonitor, never()).setTryCell(true);
         assertEquals(TETHER_ERROR_NO_ERROR, mTethering.getLastErrorForTest(TEST_P2P_IFNAME));
diff --git a/Tethering/tests/unit/src/com/android/networkstack/tethering/UpstreamNetworkMonitorTest.java b/Tethering/tests/unit/src/com/android/networkstack/tethering/UpstreamNetworkMonitorTest.java
index 90fd709..f192492 100644
--- a/Tethering/tests/unit/src/com/android/networkstack/tethering/UpstreamNetworkMonitorTest.java
+++ b/Tethering/tests/unit/src/com/android/networkstack/tethering/UpstreamNetworkMonitorTest.java
@@ -36,7 +36,6 @@
 import static org.mockito.Mockito.anyInt;
 import static org.mockito.Mockito.anyString;
 import static org.mockito.Mockito.inOrder;
-import static org.mockito.Mockito.reset;
 import static org.mockito.Mockito.spy;
 import static org.mockito.Mockito.times;
 import static org.mockito.Mockito.verify;
@@ -141,7 +140,7 @@
         assertTrue(mCM.hasNoCallbacks());
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
 
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         assertEquals(1, mCM.mTrackingDefault.size());
 
         mUNM.stop();
@@ -149,13 +148,13 @@
     }
 
     @Test
-    public void testListensForAllNetworks() throws Exception {
+    public void testListensForUpstreamNetworks() throws Exception {
         assertTrue(mCM.mListening.isEmpty());
 
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         assertFalse(mCM.mListening.isEmpty());
-        assertTrue(mCM.isListeningForAll());
+        assertTrue(mCM.isListeningForUpstream());
 
         mUNM.stop();
         assertTrue(mCM.onlyHasDefaultCallbacks());
@@ -179,7 +178,7 @@
             assertTrue(TestConnectivityManager.looksLikeDefaultRequest(requestCaptor.getValue()));
         }
 
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         verify(mCM, times(1)).registerNetworkCallback(
                 any(NetworkRequest.class), any(NetworkCallback.class), any(Handler.class));
 
@@ -192,7 +191,7 @@
         assertFalse(mUNM.mobileNetworkRequested());
         assertEquals(0, mCM.mRequested.size());
 
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         assertFalse(mUNM.mobileNetworkRequested());
         assertEquals(0, mCM.mRequested.size());
 
@@ -215,7 +214,7 @@
         assertFalse(mUNM.mobileNetworkRequested());
         assertEquals(0, mCM.mRequested.size());
 
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         verify(mCM, times(1)).registerNetworkCallback(
                 any(NetworkRequest.class), any(NetworkCallback.class), any(Handler.class));
         assertFalse(mUNM.mobileNetworkRequested());
@@ -251,7 +250,7 @@
         assertFalse(mUNM.mobileNetworkRequested());
         assertEquals(0, mCM.mRequested.size());
 
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         assertFalse(mUNM.mobileNetworkRequested());
         assertEquals(0, mCM.mRequested.size());
 
@@ -271,7 +270,7 @@
 
     @Test
     public void testUpdateMobileRequiresDun() throws Exception {
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
 
         // Test going from no-DUN to DUN correctly re-registers callbacks.
         mUNM.setUpstreamConfig(false /* autoUpstream */, false /* dunRequired */);
@@ -301,7 +300,7 @@
         preferredTypes.add(TYPE_WIFI);
 
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         // There are no networks, so there is nothing to select.
         assertSatisfiesLegacyType(TYPE_NONE, mUNM.selectPreferredUpstreamType(preferredTypes));
 
@@ -374,7 +373,7 @@
     @Test
     public void testGetCurrentPreferredUpstream() throws Exception {
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         mUNM.setUpstreamConfig(true /* autoUpstream */, false /* dunRequired */);
         mUNM.setTryCell(true);
 
@@ -446,7 +445,7 @@
     @Test
     public void testLocalPrefixes() throws Exception {
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
 
         // [0] Test minimum set of local prefixes.
         Set<IpPrefix> local = mUNM.getLocalPrefixes();
@@ -558,7 +557,7 @@
         preferredTypes.add(TYPE_MOBILE_HIPRI);
         preferredTypes.add(TYPE_WIFI);
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         // Setup wifi and make wifi as default network.
         final TestNetworkAgent wifiAgent = new TestNetworkAgent(mCM, WIFI_CAPABILITIES);
         wifiAgent.fakeConnect();
@@ -579,7 +578,7 @@
         final String ipv6Addr1 = "2001:db8:4:fd00:827a:bfff:fe6f:374d/64";
         final String ipv6Addr2 = "2003:aa8:3::123/64";
         mUNM.startTrackDefaultNetwork(mEntitleMgr);
-        mUNM.startObserveAllNetworks();
+        mUNM.startObserveUpstreamNetworks();
         mUNM.setUpstreamConfig(true /* autoUpstream */, false /* dunRequired */);
         mUNM.setTryCell(true);