> Then there is a free phone. You don't pay a lower price if you refuse the phone, so it's effectively free. No. The cost of the phone is baked into the plan

> Then there is a free phone. You don't pay a lower price if you refuse the phone, so it's effectively free. No. The cost of the phone is baked into the plan and you get punished with a higher price if you don’t buy your phone from the carrier. It’s a way of getting people to think of it as free so they’re effectively buying a new phone every 2-3 years. It’s a variation of tied selling, but instead of requiring you buy a phone from them they just price it so it’s obviously a bad deal not to.