This "inappropriate use" thing seems to read a little sketchy. Especially because further down in the TOS in 18(b)(iv) they state it's a violation to "modify any software included in any Mobile Device(s)."
I know they probably won't fine you $500 or charge you exorbitantly if you root your phone. But under the terms here aren't you're basically agreeing that they can if they want?
The only way they can afford to offer this is because they are forcing people to use wifi when available. So I could see them cutting off service to people who root their phones. As to inappropriate use, they have articulated clear standards for fair use here: http://www.republicwireless.com/home/pdfs/FairUsePolicyNovem... but the standards are based on proprietary info, so you won't be able to double check stats.
In other words, they must reserve a very big hammer to protect themselves simply due to the type of business they are trying to start. Said hammer could be abused, but they cannot not have it.
I know they probably won't fine you $500 or charge you exorbitantly if you root your phone. But under the terms here aren't you're basically agreeing that they can if they want?