Republic Wireless’ novel VOIP-based phone service is just starting up, and customers are receiving their LG Optimus S phones now. Because of Republic’s unique 3G/WiFi switching system, it requires some custom changes to the phone’s hardware. But according to some eagle-eyed analysis of an early unboxing video, the phone’s beta hardware isn’t the only thing that’s customized: it looks like the phone is running a modified version of the most popular custom ROM out there, CyanogenMod.

There’s nothing sneaky about running CyanogenMod on retail hardware, just in case you’re wondering. Steve Kondik and the CM team publish the source code for the CyanogenMod version of Android, in the same fashion that Google makes the original source code available. Anyone, anywhere is free to use and modify the CyanogenMod code as they see fit – and it looks like Republic Wireless has done just that.

The version of Gingerbread running on the modified Optimus S isn’t labelled as CyanogenMod, and it includes Google’s apps and the Android Market, something that isn’t supposed to be bundled with CM7 (Republic probably got the authorization directly from Google). Still, looking at the lockscreen and other UI elements, there’s no doubt that CyanogenMod code is running underneath. Attributed or not, it’s a major win for the CyanogenMod team and the Android mod community at large. No news yet on an Ice Cream Sandwich upgrade, but if the phone’s already running community-modded software, it couldn’t be that difficult to port it over.

[via Phandroid]