A:Answer Even if the device isn't purchased with a contract, it is locked at the factory by AT&T. Devices purchased outside of contract however are unlockable by AT&T if you meet certain criteria - Some of the time that involves a minimum timeframe of activated service - But be cautioned, even if the device is unlocked, if you were to move to another GSM provider (here in the US, only T-Mobile is compatible, or one of the many MVNO/Prepaid providers) some 3G/4G bands may not be available on the device that the other networks require, as the PadFone is an AT&T exclusive device its only designed to work on the 3G/4G/LTE bands for AT&T.
Hope this helps!