I just talked to an AT&T sales rep and this is what I was told...there is no subsidy for the new iPhone 3G - $199/$299 is the retail price, and that is the price that they will be selling the phones for. If you are an existing customer, you keep your current AT&T rate plan, but your data plan will go up to $30 for the new iphone and your contract will extend by another 2 years regardless of where you are at your current contract. If you a new customer, then you will be subject to the new iphone rate plan as well. I know that I didn't have to change my rate plan when I bought the 16GB iphone in February...I already had a family plan of $59.99 for two lines with 550 minutes...so I got to keep that family plan, but just add on the $20 iphone data plan for the iphone. The sales rep says same thing for the iphone 3G - I get to keep my existing rate plan..but my data plan will go up by $10 if I buy the 3G phone. Hope the info is correct.