In actual fact, this demonstration is not breaking any laws (and bears no resemblance to sodomy). There are two GSM bands in the US, 850 and 1900 MHz. Chris Paget, in spite of having a UK domain, lives in the Bay Area. His Android demo used RF hardware operating in the 900 MHz ISM band, which does not require a license provided the transmit power is less than 30 dBm (1W) as per FCC part 15. The maximum transmit power of the USRP hardware is ~23 dBm. Ergo, not illegal.

Other posters have made reference to Special Temporary Authority that one can apply for from the FCC in order to legally operate radio experiments in licensed spectrum. A relevant example is the OpenBTS GSM network at Burning Man-- http://openbts.sourceforge.net/FieldTest3/STAGrant.pdf

The so-called "GSM guard band" between the DECT cordless phone band and the DCS1800 European GSM band being opened up in Western Europe. Unlicensed low-power GSM installations have in fact been legalized in the Netherlands. This swath of spectrum, 1781.7-1785 MHz paired with 1876.7-1880 MHz, was also auctioned off for cheap to 12 companies in the UK by Ofcom (the British equivalent to the FCC) in 2006.

OpenBTS and OpenBSC are complementary but not cooperative (at least not yet) projects. The Base Transceiver Station (BTS) and Base Station Controller (BSC) are different key components in a GSM network. For clarification, see: http://gnuradio.org/redmine/wiki/gnuradio/OpenBTSFAQ#What-is...

OpenBTS currently supports GSM full rate voice and SMS and allows GSM phone to connect to the telephone network via SIP using Asterisk or FreeSwitch. OpenBSC supports GPRS inasmuch as the commercial BTS (e.g., the ip.access nanoBTS) connected to it supports GPRS.