Reader Micah is under contract with AT&T, and is interested in getting the new iPhone when it comes out. Unfortunately, Micah’s account is not currently eligible for an upgrade, so AT&T keeps telling him that he’ll need to cancel his phone, and pay an ETF in order to get the new iPhone. As far as we can tell, this just isn’t true.

Micah writes (to AT&T):

First I would like to say that I have been a loyal Cingular / AT&T wireless customer for over three years. Unfortunately last year my smart phone was stolen and since I have after hours duties and responsibilities, as many professionals, I was forced to purchase a phone the same day to meet employment regulations; gladly re-upping my two year contract since at that time I was satisfied with the service I received from AT&T (and still am).

Given the nature of my job and on call responsibilities, the ability to VPN to my work / home environment, visual voice mail, true push e-mail integration the new iPhone 3G seams to be a viable choice for myself and others in my situation. To be honest, I was very excited by many of the new features and was planning to rush out and purchase one of the new 3G models as soon as they hit stores and even took a vacation day.

Granted since I was still under contract with AT&T I expected that I would have to pay a higher price than that of the individual switching service or creating a new line (which I may not agree on principal with but I understand the subsidized service model that the cell phone industry works on; I have been overall very happy with the service I received). However, when I visited a local AT&T store and spoke with a friendly representative I was informed that my phone upgrade period was on up until late November. And that while I could purchase any other phone in the store for full price, that I could not purchase the iPhone without canceling my active account and re register in which case they could not guarantee that I would keep the same number and would have to pay a $175 early termination fee.

Finding this hard to believe I called the AT&T Shop division and the AT&T Customer support desk and asked them what I could do in my situation and if I could buy out the remaining 5 months of my “upgrade clause”. One of the representatives at the AT&T Shop suggested that I add a second line to my account which would be the new line that I “activate” the iPhone over and then move the iPhone to my regular line before canceling the existing line and incurring another $175 early termination fee. The second representative I spoke with said that since I wanted to keep my number I would not be able to purchase an iPhone period.

Our lovely tech-obsessed sister site Gizmodo published a internal AT&T memo that says that customers such as Micah (who are under contract, but not eligible for an upgrade) will be able to purchase the iPhone at a price that has not yet been determined.

Upgrade Eligibility and Qualified Upgrade Pricing
Upgrade eligibility will be determined based on standard upgrade eligibility rules. Customers must be upgrade eligible to receive the qualified upgrade pricing. However, not all customers will be qualified upgrades. AT&T has not determined the price of the 3G device for non-qualified upgrades.

All customers will be required to sign a 2-year agreement. There will not be a “no commitment” price for the iPhone 3G.

Note: When the 3G device launches, all active postpaid customers in good standing with a 2G iPhone will be eligible to receive the qualified upgrade pricing for a 3G device regardless of service tenure. (Customers that would not otherwise be eligible due to tenure will be made eligible at launch).

Maybe AT&T should read their own leaked memos.

AT&T Memo to Retail Managers Shows iPhone 3G Policy [Gizmodo]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.