Anyone can get a plan with AT&T without a contract. Every phone (except the iPhone) has a "no commitment" price. With this, you buy the phone outright. You don't get the extra discounts because you're not signing a contract, but you can definitely get service without a contract. However, because of the discounts, two-year contracts can be a good thing (which I'm assuming is where the AT&T lawyer was intending to go with his line of reasoning regarding the ETF).
@JKingGrim: The rep you talked to was absolutely wrong about you needing to sign a contract if you have your own equipment. As far as the signal goes, if you can get a signal with T-Mo then you can get at least the same signal with AT&T, if not better due to their use of multiple bands.
Quote:
1. Pay full price for the phone, get a monthly contract with no ETF.
or
2. Pay a discounted price for the phone, have a contract with an ETF that goes down each month by (discount/#months on contract)
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That's actually exactly how it works. AT&T even has prorated ETFs now.