UPDATE: I have now reviewed my bills and the options offered by AT&T. I definitely have not "been screwing myself" and Small White Car was categorically wrong when he or she said I "should definitely change. [I'm] currently on a plan that has the cost of a phone built into it every 2 years." Small White Car used the word "definitely", and so I can say that Small White Car was definitely wrong. Given the number of lines I have, the number of minutes I want, the amount of data I want, and the unlimited texting that I want, I am on the cheapest plan possible from AT&T. There is no cheaper plan. I cannot forgo the privilege of upgrades and get a cheaper plan. The only change possible would be to get a Next plan, and that would increase my monthly bill by the following amount: (price of phone) / (number of months). I'm very impressed Small White Car knows that I "should definitely change" while knowing so little about my telephone plan, but I am less impressed because Small White Car was 100% wrong. Making wrong assumptions is easy and fun, isn't it? It's especially fun because Small White Car got a bunch of upvotes on the post full of wrong assumptions.
Approximately once per year, I reassess my phone plan. How many minutes do I need? How much data do I need? How much texting do I need? How much is this stuff from a competitor, like Verizon or T-Mobile? Is there a different "package" that can get me what I need for less money? Sometimes I do make a change.
I have never had the option to save a single penny by forgoing the right to subsidized phone upgrades. That has never been an option, and I have done that research. If it had ever been an option, I would have considered it. Since it was never an option, I tried to use the upgrades. But the upgrades don't cover the full cost of an iPhone, so sometimes it is wise to remember the sunk cost fallacy and keep the phone you have.
The Next plan is not quite the same as the old two-year-contract deal, and some people seem to be missing this important point. By taking no action, I was not automatically signed up for the Next plan. When AT&T stopped offering upgrades, by definition the cost of a new phone was not built into my phone bill. If I paid more for a Next plan, then the cost of a new phone would be in my monthly bill, but I never signed up for a Next plan.
The Next plan actually is very straightforward, they take the true price of the phone and divide it across a number of months. (The names are a bit confusing, the Next Every Year plan does not divide it into 12, they divide it into more pieces, but they named it assuming you will sell back your old phone after exactly 12 months.)
The old two-year-contract deal was less straightforward. First of all, unlike Next, it was not optional. There was no way to get a discount on the monthly bill by saying "I will never want an upgrade". I know, I looked into it repeatedly. Second, because they have vendor lock-in for two years (you have sold your soul for the next two years), that is valuable to AT&T. The phone company likes to lock you in for two years, and they will spend money for that guarantee. This is why they didn't offer a discount to people who didn't want upgrades.
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