How can I unlock in this situation?

I have a 3gs with 05.16.05 baseband. I ended my service with ATT last year and the 3GS has just been sitting around. Today, I asked ATT to unlock my phone, but they said since my service is not active they will not unlock it. What can I do here? Is my only option to jailbreak? Can Apple unlock it?

I called AT&T and after providing my the IMEI number of the phone and verifying that it is out of contract they agreed to unlock the phone.  They apparently send the info to apple and you get an email to "backup and teh restore" When it is restored it is unlocked. 
Curiously my wife and I have two 3Gs phones and one of them keeps saying "N SIM card" I have another post in ths regard.  The SIM that was recognized by AT&T is Airtel from India and I got even a Text messsage indicating the cost of call and text.
I put the same SIM in the pther phone and it still says "No SIM card" 
I am waiting for some enlightened soul to post a reply.
Raj

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