Jailbroken iPhones get a full-blown Alternate App Store. But Apple wants to shut down anyone who refuses to play by their rules. Make no mistake, you bought it, but your iPhone still belongs to Apple

To which an ever increasing gang of outlaw iPhone owners are screaming, “Screw you, Mr Jobs!”

The news of more openness and more freedom is something all geeks welcome, but not so for the control freaks at Apple. They’ve called in the sharks who are attempting to stretch the DMCA copyright protection in the US to prevent anyone from altering Apple’s software in any unauthorized way. Which is to say, you don’t really own your iPhone, they do. And you can only do to it what they say you can:  [via iLounge]

Jay Freeman, developer of Cycorder and the Cydia Store, says he decided to launch the service so developers whose work is either outlawed or denied access to the App Store have a way to make money from their efforts. A 27-year-old computer science doctoral student in Santa Barbara, Freeman says he intends to charge developers no more than the commission Apple does for his site’s billing services. Apple recently argued to the U.S. Copyright Office that jailbreaking constitutes copyright infringement and a DMCA violation, and is therefore illegal; Freeman says he has a lawyer lined up in case Apple takes legal action against him. “The overworking goal is to provide choice,” he says. “It’s understandable that [Apple] wants to control things, but it has been very limiting for developers and users.”

In theory, Apple could start suing anyone who owns a jailbroken phone. Fortunately the Electronic Freedom Foundation is ready for the fight, and is petitioning the Copyright Office to rule that it’s abosultely legal to hack your iPhone. The EFF’s efforts has found support from the likes of Mozilla, Skype and others: [via EFF]

Every three years, the U.S. Copyright Office convenes a rulemaking to consider granting exemptions to the DMCA’s ban on circumvention to mitigate the consumer harm. EFF has already filed exemption requests with the Copyright Office addressing the issues, but the rulemaking proceeding also accepts public comments about the proposals.

“Companies are using the DMCA to threaten customers out of exercising their consumer rights,” said EFF Civil Liberties Director Jennifer Granick. “The Copyright Office needs to hear real stories about how these software locks frustrate consumers and developers.”

If you want to throw your support behind the EFF too, sign the petition at: Free Your Phone

But for those of us who live outside the DMCA, jailbreaking seems like an obvious choice — especially when you see the Cydia App Store [via Smoking Apples]:

Will the Cydia Store be a success? Surely. There are many who have a jailbroken iPhone, and the relatively easy way (if you can get past the horrible UI designs) of purchasing hacked apps will certainly make some people rich. Besides, the Cydia Store will have far fewer apps which means it will be easier to have a glance at them all. This will result in a higher number of puchases-per-app. Will the Cydia Store pose a threat to Apple? Not in any measurable way, no. If the App Store already has an app, there’s no chance of anyone purchasing that same functionality using the Cydia Store

The Cydia Store will accept Amazon payments, Pay Now, and Pay Pal.

As for Rock Your Phone, the forethcoming jailbreaking service, expect more news in a month or so. When it goes public, expect anew wave of iPhone owners to join the outlaw gang.