Please let me know how to proceed.

We're sorry, we are unable to continue with your activation at this time.
Please try again later, or contact customer care.    

Thank you for your promt reply.
Below please see my answers:
Is iPhone hacked/jailbroken?
No but it was in the past.
Is iPhone lock to previous carrier?
Yes, At&t. Some local mobile service center suggested to me to make it factory unlocked for some $30. After it was ok. I was able to update FW etc. Once the battery was low and when I tried to switch it on after recharge it was restarting each time. After restore via itunes I cannot activate now.
Is your carrier iPhone supported?
Yes.

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