Wasn't as smooth for me, but bottom line I got what I want (I think). Told flat out "no" to start, with the only option paying full price for the phone in order to avoid the fee. I then asked if there were any other options besides paying full price, again no dice. This time I was given an explanation that the fee was used for the resources needed to support their upgrade process (personnel and infrastructure used for activation, transfer, troubleshooting, etc) which is why I needed to pay it. Tried one last time by pulling the everyone-else-seemed-to-get-it-without-any-trouble and the I-have-been-a-long-time-customer-currently-in-good-standing cards. That's when the rep finally gave me the credit, but told me in a firm tone (if you can infer tone through a chat) that this was only a one time thing, and in the future I will have to pay the fees to get discounted upgrades. And the fee wasn't waived, I'll need to chat or call back when the charge hits my account and reference the chat I had today to get the credit.
So while it wasn't as pleasant or trouble-free at least based on what others have written on this thread, the rep was polite and I suppose he was just doing his job trying to hold the line and save his company $36. Nothing to complain about with AT&T or how any of this went down. Actually I'm okay with it even with the sorta hassle since I'm supposed to be getting a credit for a fee I was willing to pay for in the first place.