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It isn't that evil

They said what a few of these factors are in their FAQ.

»www.att.com/gen/press-room?pid=1574

quote:
Pricing

Importantly, we want our customers to better understand our wireless device upgrade program. Like most U.S. carriers, we offer a variety of phones that we sell below our actual cost when customers agree to sign service agreements. In general, the more a customer spends with us, the quicker they become eligible for a price break on a new device. For example, iPhone customers who spend more than $99 a month per line with us generally are eligible for an upgrade between 12 and 18 months into their contract.
So if you pay your bill on time and spend a bit more than average (eg $99), you can upgrade earlier. These are subsidized phones they claim to be selling you BELOW their cost and normally you aren't eligible for an upgrade until your 2 year term is up. But if you are a particularly good customer who pays on time and has a pricy plan, they will let you upgrade early because you are paying enough monthly to justify them giving you another new phone at a subsidized price.
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POKE 65495,1

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