Gee...all I ever hear is that AT&T is a dog of a co....and I'm 10 thousand miles away....

And I always heard that technology was making the world smaller and the people closer.         

That pretty well defines spotty coverage!  

I believe the proper name is The Man Cave.

Every phone service has issues in certain states or places, no one is perfect. And if there was a perfect company their would be no competition.

Of course, why else would they drop the cost of the iPhone AND give early-adopters $100 store credit? Sales where clearly going down and they figured a price drop would fix that.
You don't just lower the price $200 on something like that out of the blue.

This is true. I live in a small country in Europe called Norway. In all my years here, I've never had problems getting a signal! I recently visited my parents in upstate N.Y. and when I wanted to make a call, I had to drive for a half hour with my phone held out the window just to get a signal!

Cingular (at&t) has really bad service in Idaho. You can get (without roaming) near the Moscow and Couer d'Alene area, and down in the Treasure Valley (Boise area), but its pretty vacant in the rest except for spotty patches...at least 2 years ago this was the case anyways. I had Cingular for a couple years in Idaho, but only because I was on the nation plan and didn't incur out of network or long distance charges.

I don't know if this is the reason for the Idaho exception, but anyways....

Actually, they have been the worst US carrier for the past decade...period. Terrible signal, terrible pricing, terrible customer service, etc etc. They took forever to become competitive and were one of the main reasons people lobbied for the ability to move their phone numbers between carriers. They acted like they had a monopoly, so we all left. Then, without customers, shock of shock, they went out of business. Until Cingular bought them and the name change.

The consumer voted AT&T wireless DEAD. This is why they paid whatever it took to have something signature for the newly restored AT&T, ergo the iPhone.

And it's why the iPhone's sales with so far below expectation at release.

Hatred of AT&T >> Interest in iPhone.

And even the massive price cut won't help as much as Jobs needs/hopes. The iPod became ubiquitous because it was available EVERYWHERE. The iPhone will lose the chance to gain that level of success, unless unbundled officially from AT&T soon. Because Nokia, etc. are all working on iPhone clones. And they will all be out, affordable, and available from whoever you want to buy one from/for long before the AT&T exclusive deal expires.

The iphone is a unique problem. I don't believe AT&T is subsidizing the cost of the units. For other phones, the carrier (not just AT&T) use the contract to help pay for the phone. Unlocking the phone is meaningless to them once you've signed up for a two-year contract, because that's what AT&T wants to have.

As for why Apple signed with AT&T? They needed a deal with a carrier to offer some of the features (only special one that I know of is visual voicemail, which is *NOT* available on an unlocked phone with any other carrier).

AT&T coverage: All carriers have areas where they are strong. New England has really good coverage with Verizon, because of the merger with Bell Atlantic Mobile. I had Sprint for a while, but it was spotty in both Florida and Massachusetts. The New England area is especially hard for coverage, because of the rock formation, which are not very good for cell signals. Not sure about other regions. But no carrier is great everywhere, so blaming the company for coverage in those areas is pointless. I'd love to blame Verizon for not offering FiOS in my neighborhood.

I think the legality is beside the point (although I believe that unlocking IS legal in the US even if a vendor makes it difficult).  This post is a news item that links to a demonstration of the iPhone being unlocked.  There is no real instruction though.

And since Apple, AT&T and T-Mobile all need to be paid to actually *USE* this hack, who is losing revenue or intellectual property and where is the crime?

I'm going to bet that there will be a race for the next few years as Apple locks down the iPhone and folks who want some freedom unlock it.

In Australia the A Triple C [ACCC] determined/declared that the Region-Coding of DVDs was a restriction of trade and thus illegal.

External Laws/agreements restricted/prohibited the importation of Region-free DVD players into Australia....but once there people were entirely free to alter them for Region-Free use....even factory-supported and warranted.

My bet is the iPhone unlocking issue is also Legal for the same determination, though, not giving a damn about Mac products, particularly over-hyped hysteria-fed ones....I haven't bothered to check....