If you have paid your bill off in full and are no longer locked under contract. AT&T is legally obligated to make sure your phone is unlocked.
So your choices are to call AT&T back and speak to someone above the scripted morons at their level 1 support.
Or you can simply google SIM UNLOCK SITES and pay to unlock it. Usually you pay, get a code within 24-48 hours via email enter a new sim card, it asks for the lock code, you enter it and BAM unlocked.
But I would suggest contacting AT&T first. As per the FCC
Q: Will my provider unlock my phone?
All service providers who signed onto the CTIA Consumer Code for Wireless Service have fully implemented the six standards on unlocking. Participants include all nationwide service providers, as well as a number of regional providers. Each participating provider has posted its unlocking policy on its company website and will respond to unlock requests.
If they refuse again, threaten to contact the FCC
Federal Communications Commission
445 12th Street SW, Washington, DC 20554
Phone: 1-888-225-5322