US copyright law was modified on Monday to make it legal to hack smartphones such as the iPhone to switch telecom service providers or install applications without Apple's approval.
The Digital Millennium Copyright Act (DMCA) revision came despite opposition from Apple, which argued that allowing iPhones to be hacked will open handsets to security holes, computer viruses, and hardware damage.
AT&T is the exclusive carrier for the iPhone in the United States and Monday's move would allow what is known as "jailbreaking," or unlocking smartphones exclusively bound to specific telecom service providers.
"The Copyright Office recognizes that the primary purpose of the locks on cell phones is to bind customers to their existing networks, rather than to protect copyrights," said Jennifer Granick of the Electronic Frontier Foundation (EFF), an Internet rights group that fought for the change.
Revisions to the act also allow tampering with electronic book readers to enable text-to-speech features that read stories aloud.
It was also made legal to bypass anti-copying technology on DVDs in the cases of documentaries, non-commercial works, and videos used for educational purposes by colleges.
"We are thrilled to have helped free jailbreakers, unlockers and vidders from this law's overbroad reach," Granick said.
"By granting all of EFF's applications, the Copyright Office and Librarian of Congress have taken three important steps today to mitigate some of the harms caused by the DMCA."
Apple steadfastly opposes breaching of safeguards built into iPhones and is still free to enforce terms of service agreed to by buyers.
Apple argued in a letter to the Copyright Office, which is in the Library of Congress, that allowing iPhones to be hacked will destroy a "chain of trust" the company has with customers.
AT&T's share price was down a fraction of a percent in after-hours trading in New York on Monday while that of rival Sprint Nextel rose nearly eight percent during the day's trading to slightly more than five dollars a share.