said by DavisPhotog:Now, the software contained on the iPhone is a whole separate deal. It is what is being licensed for your used. The firmware of the phone is probably not allowed to be modified under the EULA, so removing it would be against the terms of use, hence making jailbreaking the slippery slope it currently is.
This all hinges on what firmware and software is running on the iphone. If all the firmware and software(including OS) are open source then no laws are broken. If I buy a computer I can replace all the firmware and software with whatever i want provided on have a right to use the software and firmware. It all comes down to what will AT&T let on its network. If they will even allow you to connect it up to their network. Chances are they won't allow you to connect modified equipment.